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https://www.courtlistener.com/api/rest/v3/opinions/866710/	12-2213-cv Berlin v. Renaissance Rental Partners, LLC UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2012 (Argued: March 19, 2013 Decided: May 6, 2013) Docket No. 12-2213-cv _______________________________________________________________ BRUCE BERLIN, NANCY BERLIN, Plaintiffs-Appellees, v. RENAISSANCE RENTAL PARTNERS, LLC, d/b/a RENAISSANCE CONDOMINIUM PARTNERS II, LOUIS R. CAPPELLI, Defendants-Appellants, DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP, Defendant.* _______________________________________________________________ Before: JACOBS, CABRANES, and STRAUB, Circuit Judges. The question presented in this appeal is whether a single-floor condominium unit in a multi- story building is a “lot,” thus triggering the disclosure and reporting requirements of the Interstate Land Sales Full Disclosure Act (“ISLA”), 15 U.S.C. § 1701 et seq. The Consumer Financial Protection Bureau (“CFPB”) and the Department of Housing and Urban Development (“HUD”)— The Clerk of Court is directed to amend the official caption in this case to conform to the listing of the parties * above. 1 the agencies presently and formerly charged, respectively, with administering ILSA—promulgated a rule defining the term “lot” to require the “exclusive use of . . . land,” 12 C.F.R. § 1010.1(b), and, in turn, interpreted the term “land” to mean “realty,” thus applying ILSA’s requirements to condominium units in multi-story buildings. Because “land” can be used as a term of art meaning “realty,” we hold that the CFPB and HUD have reasonably interpreted their own definition of the term “lot.” The United States District Court for the Southern District of New York (Frederick P. Stamp, Jr., Judge of the United States District Court for the Northern District of West Virginia, sitting by designation) therefore properly granted summary judgment to the plaintiffs. We also hold that the District Court did not err or “abuse its discretion” by awarding attorneys’ fees. Affirmed. Chief Judge Jacobs dissents in a separate opinion. ROBERT HERMANN, DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, White Plains, NY, for Defendants- Appellants. LAWRENCE C. WEINER, Wilentz, Goldman & Spitzer, P.A., Woodbridge, NJ, for Plaintiffs-Appellees. NANDAN M. JOSHI (Meredith Fuchs, General Counsel, To- Quyen Truong, Deputy General Counsel, David Gossett, Assistant General Counsel for Litigation, on the brief), Consumer Financial Protection Bureau, Washington, DC, for the Consumer Financial Protection Bureau, Amicus Curiae in Support of Appellees. JOSÉ A. CABRANES, Circuit Judge: The Interstate Land Sales Full Disclosure Act (“ISLA”), 15 U.S.C. § 1701 et seq., “protects individual buyers or lessees who purchase or lease lots in large, uncompleted housing developments, including condominiums, by mandating that developers make certain disclosures.” Bacolitsas v. 86th & 3rd Owner, LLC, 702 F.3d 673, 676 (2d Cir. 2012). The question presented in this appeal is whether a single-floor condominium unit in a multi-story building is a “lot,” thus triggering ILSA’s 2 protections. See 15 U.S.C. § 1703(a)(1) (statutory requirements apply to the “sale or lease of any lot” that is not otherwise exempt). The Consumer Financial Protection Bureau (“CFPB”) and the Department of Housing and Urban Development (“HUD”)—the agencies presently and formerly charged, respectively, with administering ILSA1—have defined the term “lot” to mean “any portion, piece, division, unit, or undivided interest in land located in any state or foreign country, if the interest includes the right to the exclusive use of a specific portion of the land.” 12 C.F.R. § 1010.1(b).2 As relevant here, the CFPB and HUD have consistently maintained that this definition applies to condominium units, including single-floor units in multi-story buildings. In particular, the CFPB and HUD have interpreted the phrase “exclusive use of . . . land” to mean exclusive use of realty, see, e.g., CFPB Letter Br. at 6, thus concluding that the statutory term “lot” applies to condominiums,3 because they “carry the indicia of and in fact are real estate,” Land Registration, Formal Procedures, and 1 “Following passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, . . . the rulemaking and other authority historically vested in [the Department of Housing and Urban Development (“HUD”)] under the Interstate Land Sales Full Disclosure Act was transferred to the newly created Consumer Financial Protection Bureau.” Bacolitsas, 702 F.3d at 675–76 n.1. 2 12 C.F.R. § 1010.1 was promulgated by the Consumer Financial Protection Bureau in 2011. The provision duplicates the same definition appearing at 24 C.F.R. § 1710.1, promulgated in 1973 by HUD. 3 We use the term “condominium” to refer to “[a] single real-estate unit in a multi-unit development in which a person has both separate ownership of a unit and a common interest, along with the development’s other owners, in the common areas.” BLACK’S LAW DICTIONARY 336 (9th ed. 2009); see also, e.g., Michael H. Schill, et al., The Condominium versus Cooperative Puzzle: An Empirical Analysis of Housing in New York City, 36 J. LEGAL STUD. 275, 277 (2007) (“The condominium owner owns his or her unit in fee simple absolute and shares an undivided interest in the common elements (for example, sidewalks, hallways, pools, clubhouse, storage place) as a tenant in common with the other condominium owners.”). New York law recognizes this form of ownership in the Condominium Act, see N.Y. REAL PROP. § 339-d et seq., which provides, in part, that “[e]ach unit, together with its common interest, shall for all purposes constitute real property,” id. § 339-g, and that “[e]ach unit owner shall be entitled to the exclusive ownership and possession of his unit,” id. § 339-h. New York law also provides for common ownership, among unit owners, of “[t]he common interest appurtenant to each unit,” id. § 339-i(2); see Gerald Lebovits & James P. Tracy, Cooperatives and Condominiums in the New York City Housing Court, 36 N.Y. REAL PROP. L.J. 45, 47 (2008) (summarizing condominium law in New York); see also note 6, post (discussing the history of condominium law). “Typically, the rules of a condominium association do not restrict to whom an owner may sell his or her apartment, although the association may maintain a seldom used preemptive right of first refusal to purchase the apartment.” Schill, ante, at 281. By contrast, in the “housing cooperative” form of property ownership, which long antedated condominium law in the United States, see note 6, post, “the owner of the building . . . is the cooperative corporation,” which is owned by shareholder-tenants who obtain leases to their respective apartments, Schill, ante, at 277, and who typically must first obtain the approval of the board of directors of the cooperative before being allowed to purchase cooperative shares and to become tenants, id. at 282; see also Lebovits & Tracy, ante, at 45 (summarizing the applicable law regarding cooperatives in New York). 3 Advertising Sales Practices, and Posting of Notice of Suspension, 38 Fed. Reg. 23,866, 23,866 (Sept. 4, 1973). We hold that the CFPB and HUD have reasonably interpreted their own definition of the term “lot.” Accordingly, the United States District Court for the Southern District of New York (Frederick P. Stamp, Jr., Judge of the United States District Court for the Northern District of West Virginia, sitting by designation) properly granted summary judgment to the plaintiffs. We also hold that the District Court did not err or “abuse its discretion” by awarding attorneys’ fees. BACKGROUND The facts in this case are straightforward and undisputed. In 2007, plaintiffs-appellants Bruce and Nancy Berlin (jointly, “Berlin”) contracted to purchase a condominium unit on the sixteenth floor of The Residence at The Ritz-Carlton, Westchester—a building then under construction in White Plains, New York—from the developer, defendant-appellee Renaissance Rental Partners, LLC, and its principal, defendant-appellee Louis R. Capelli (jointly, “Renaissance”). Two years later, and before title was transferred, Berlin renounced the agreement and demanded a full refund of the $167,625 deposit. Berlin argued that the contract was voidable because Renaissance had not furnished a “printed property report,” as required by 15 U.S.C. § 1703(a)(1)(B).4 4 As relevant to this case, ILSA provides in 15 U.S.C. § 1703: (a) Prohibited activities It shall be unlawful for any developer or agent, directly or indirectly, to make use of any means or instruments of transportation or communication in interstate commerce, or of the mails— (1) with respect to the sale or lease of any lot not exempt under section 1702 of this title— (A) to sell or lease any lot unless a statement of record with respect to such lot is in effect in accordance with section 1706 of this title; (B) to sell or lease any lot unless a printed property report, meeting the requirements of section 1707 of this title, has been furnished to the purchaser or lessee in advance of the signing of any contract or agreement by such purchaser or lessee; . . . ... (c) Revocation of contract or agreement at option of purchaser or lessee where required property report not supplied In the case of any contract or agreement for the sale or lease of a lot for which a property report is required by this chapter and the property report has not been given to the purchaser or lessee 4 When Renaissance refused the rescission and denied the refund request, Berlin brought this suit pursuant to 15 U.S.C. § 1709, which provides a right of action “at law or in equity against a developer or agent if the sale or lease was made in violation of section 1703(a) of this title.” Id. § 1709(a). Applying principles of agency deference, the District Court granted summary judgment to Berlin in a memorandum decision and order dated April 27, 2012. See Berlin v. Renaissance Rental Partners, LLC, 09 Civ. 8477 (FPS), slip op. at 8-12 (S.D.N.Y. Apr. 27, 2012) (“Dist. Ct. Op.”). The Court explained that the agency definition of the term “lot” does not reveal “any intention to limit the application of ILSA to ‘horizontal’ condominiums, and to exclude high-rise or ‘vertical’ condominiums.” Id. at 8. Because “‘condominiums carry the indicia of and in fact are real estate,’” id. at 10 (quoting 38 Fed. Reg. at 23,866), the Court continued, “the proper focus regarding the analysis of whether a unit has exclusive rights to the use of land under 24 C.F.R. § 1710.1 is whether the purchase of the unit gave the purchasers the exclusive right to a unit, or any type of ‘realty,’” id. (referencing Winter v. Hollingsworth Props., Inc., 777 F.2d 1444, 1448 (11th Cir. 1985)). Finally, the Court noted the marked absence of “an opinion by any court which has found that ILSA is inapplicable to any type of condominium, much less a high-rise condominium in particular.” Id. at 14. Also relevant to this appeal, the District Court’s decision and order partially granted Berlin’s motion for attorneys’ fees by awarding fees incurred “from the date of this Court’s memorandum decision and order denying the defendants’ motion to dismiss on August 19, 2011 until the date of this memorandum decision and order.” Id. at 15. In support of its decision to award fees, the in advance of his or her signing such contract or agreement, such contract or agreement may be revoked at the option of the purchaser or lessee within two years from the date of such signing, and such contract or agreement shall clearly provide this right. 5 District Court explained that Renaissance’s argument that the condominium unit was not a “lot” within the meaning of ILSA “had been all but foreclosed by other case law interpreting ISLA.” Id. On appeal, Renaissance asserts that ownership of a condominium unit in a multi-story building does not include the right to “the exclusive use of a specific portion of the land,” 12 C.F.R. § 1010.1(b), because the term “land” refers to the “tangible surface of the earth,” Appellants’ Br. 14. Renaissance also contests the District Court’s decision to award attorneys’ fees. After receiving the parties’ briefs, we invited the CFPB, which did not participate in the District Court proceedings, to submit a letter brief offering its views. The CFPB responded by letter brief on March 12, 2013, explaining, in part: HUD explained when it promulgated the definition of “lot” in 1973 that “condominiums carry the indicia of and in fact are real estate.” 1973 Rule, 38 Fed. Reg. at 23866. Accordingly, “the proper focus regarding the analysis of whether a unit has exclusive rights to the use of land under 24 C.F.R. § 1710.1 is whether the purchase of the unit gave the purchasers the exclusive right to a unit, or any type of ‘realty.’” [Dist. Ct. Op. at 10.] In that regard, the preamble to the 1973 Rule makes clear that a condominium is “equivalent to a subdivision, each unit being a lot.” 38 Fed. Reg. at 23866 (emphasis added). Because the condominium unit is itself a lot for purposes of ILSA, a purchaser of the unit need not have a separate interest in “raw land” to be entitled to the protections of ILSA’s disclosure and anti-fraud requirements. . . . As HUD explained in 1973, the “application of [ILSA] to condominiums has been consistent [HUD] policy since the issue was first raised in 1969”—the year that ILSA took effect. 1973 Rule, 38 Fed. Reg. at 23866; see ILSA § 1422, 82 Stat. at 599 (effective date provision).5 HUD consistently reaffirmed that determination in subsequent guidance documents. See, e.g., 40 Fed. Reg. at 47166 (“For jurisdictional purposes, a condominium ‘unit’ is a ‘lot.’”); 1996 Guidance, 61 Fed. Reg. at 13596 (stating that the definition of “lot” applies to the “sale of a condominium or cooperative unit”). . . . ... . . . Appellants argue that the 1973 regulation, by using the term “land,” was intended to apply only to condominiums that were “horizontal developments and . . . campgrounds,” Br. 7 (quoting 1973 Rule, 38 Fed. Reg. at 23866), and not “condominiums where purchasers have [only] exclusive use of their ‘unit,’” ibid. That argument is contradicted by contemporaneous HUD statements that 5 In a footnote, the CFPB explained that, “although the term ‘land’ might refer merely to the ‘ground, soil, or earth,’ in a legal sense, it ‘signifies everything which may be holden,’ including ‘anything that may be classed as real estate or real property.’” CFPB Letter Br. at 7 n.5 (quoting BLACK’S LAW DICTIONARY 1019 (4th ed. 1968)). 6 demonstrate its understanding that ILSA applies to multistory condominium developments. In the preamble to the 1973 rule, HUD made clear that ILSA would apply to “condominiums intended as primary residences in metropolitan areas” that did not qualify for the two-year construction exemption. 1973 Rule, 38 Fed. Reg. at 23866. As the district court found, HUD’s discussion of condominiums “in metropolitan areas” reflected its view that ILSA’s protections extend to purchasers of “high-rise or ‘vertical’ condominiums.” [Dist. Ct. Op. at 8.] Indeed, less than six months after issuing the 1973 Rule, HUD removed any doubt on the matter by issuing guidelines designed to accommodate “the realities of condominium construction, especially high-rise construction.” 1974 Guidance, 39 Fed. Reg. at 7824 (emphasis added). The 1974 Guidance thus makes clear that the term “lot” is not confined to “horizontal developments” and “campgrounds.” . . . Appellants argue (Br. 13) that the definition of the term “land” used in 24 C.F.R. § 1710.1 is determined by New York state property law, which they claim defines “land” to exclude “structures or improvements constructed on the land.” As this Court observed, however, ILSA creates “a national standard to guarantee full disclosure for the benefit of prospective buyers.” Bacolitsas, 702 F.3d at 682 (emphasis added). ILSA’s national reach requires that the meaning of the federal regulatory term “land” be determined under federal law. CFPB Letter Br. at 6–7, 10–11. The CFPB also participated in oral argument. DISCUSSION A. The only merits dispute at issue in this appeal is whether a single-floor condominium in a multi-story building “includes the right to the exclusive use of a specific portion of the land,” 12 C.F.R. § 1010.1(b) (emphasis supplied), thus qualifying as a “lot” within the meaning of ILSA. We review this legal question de novo. See Maslow v. Bd. of Elections in N.Y.C., 658 F.3d 291, 295–96 (2d Cir. 2011). The consistent and longstanding view of the CFPB, HUD, and all courts that have considered this issue is that a single-floor condominium unit in a multi-story building is a “lot” within the meaning of ILSA when ownership of the unit includes the right to exclusive use of the unit. “It is well established that an agency’s interpretation need not be the only possible reading of a regulation—or even the best one—to prevail. When an agency interprets its own regulation, the Court, as a general rule, defers to it unless that interpretation is plainly erroneous or inconsistent 7 with the regulation.” Decker v. Nw. Envtl. Def. Ctr., 133 S. Ct. 1326, 1337 (2013) (internal quotation marks omitted). We conclude that the interpretation by the CFPB and HUD of their own regulation is reasonable and therefore warrants deference. In common usage, the term “land” brings to mind the surface of the earth. In legal parlance, however, “land” can have a different meaning. The term “land” is sometimes used to mean “[a]n estate or interest in real property,” a concept that “‘is not restricted to the earth’s surface, but extends below and above the surface.’” BLACK’S LAW DICTIONARY 955 (9th ed. 2009) (quoting PETER BUTT, LAND LAW 9 (2d ed. 1988)). Moreover, ownership of “land,” in this technical sense, does not require ownership of soil or other physical matter tied to the earth. “‘Ultimately, as a juristic concept, “land” is simply an area of three-dimensional space, its position being identified by natural or imaginary points located by reference to the earth’s surface.’” Id. (quoting the same). Inasmuch as “land” is sometimes used as a term of art referring to “real estate,” the CFPB and HUD have reasonably concluded that their own definition of “lot” applies to a condominium unit in a multi-floor building. Condominium ownership had only emerged in the continental United States in the 1960s,6 but by the time HUD promulgated its definition of “lot” in 1973, the agency 6 American condominium ownership emerged in Puerto Rico (by way of Cuba) in the 1950s, and quickly spread to the continental United States in the 1960s, following Puerto Rico’s successful lobbying efforts to amend the National Housing Act to provide for federal insurance of condominium mortgages. See Curtis J. Berger, Condominium: Shelter on a Statutory Foundation, 63 COLUM. L. REV. 987, 987–88 & n.4 (1963) (noting the influence of Puerto Rican lobbying); Robert G. Natelson, Condominiums, Reform, and the Unit Ownership Act, 58 MONT. L. REV. 495, 502 (1997) (observing that, “[a]lthough antecedents of the condominium concept existed in Medieval times,” condominium statutes first appeared in Civil Law countries in the first half of the twentieth century). Largely because of economic advantages associated with condominium ownership, the condominium has become the dominant form of apartment ownership in the United States. Schill, ante, note 3, at 275–77. In New York City, however, cooperative apartments, or “co-ops,” have existed since the nineteenth century and still make up the vast majority of common-interest apartment buildings, due in part to the exclusivity permitted through ownership by a cooperative corporation that reviews applications of putative co- owners. Id. at 275–79, 284–85, 313–14; see also note 3, ante (summarizing the basic differences between condominiums and housing cooperatives). One of the earliest of these co-ops was the Amalgamated Cooperative Houses in the Kingsbridge Heights neighborhood of the Bronx, built by Sidney Hillman’s Amalgamated Clothing Workers Union in the 1920s “to create a community that represented universal humanistic values” with “no single ideology.” Christopher John Farah, For a Working-Class Dream, a New Day, N.Y. TIMES, May 4, 2003, at Section 14; see also RICHARD PLUNZ, A HISTORY OF HOUSING IN NEW YORK CITY 153–55 (1990). Today the world’s largest co-op complex, spanning 35 buildings, is Co-op City in the Baychester neighborhood of the Bronx, built by the United Housing Foundation, “a nonprofit membership corporation established for the purpose of aiding and encouraging the creation of adequate, safe and sanitary housing accommodations for wage earners and other persons of low or moderate income.” United Hous. 8 was already applying ILSA to sales of condominium units on the basis that those units are real estate. As HUD explained at that time: The application of the Act to condominiums has been consistent OILSR7 policy since the issue was first raised in 1969. The bases for this position are that condominiums carry the indicia of and in fact are real estate, whether or not the units therein have been constructed. A condominium is accordingly viewed by OILSR as equivalent to a subdivision, each unit being a lot. Adverse comment, particularly from builders, asserts that condominiums are equivalent to houses and the sale of houses was not intended to be covered by the Act. However, the right to condominium space is a form of ownership, not a structural description. This condominium concept is employed as an ownership form for completely horizontal developments and even for campgrounds. Congress recognized the need to exempt professional builders from the Act and provided an appropriate exemption [in 15 U.S.C. § 1702(a)(2)]. For a condominium unit sale to be exempted from the Act, it must accordingly qualify for exemption; i.e., either it must be completed before it is sold, or it must be sold under a contract obligating the seller to erect the unit within two years from the date the purchaser signs the contract of sale. 38 Fed. Reg. at 23,866. In other words, a right to exclusive use of a condominium unit is a right to exclusive use of real estate, and therefore a condominium unit—whether in a multi-story building or even in “completely horizontal developments” and “campgrounds”—is a “lot” within the meaning of ILSA.8 The relevant agencies—originally HUD and now the CFPB, see note 1, ante—have consistently maintained this understanding ever since the issue was first raised in 1969. See, e.g., CFPB Letter Br. at 5–13; 61 Fed. Reg. 13,596, 13,602 (1996 HUD Guidance) (“lot” includes “a condominium or cooperative unit”). Congress has at least implicitly recognized that interpretation. See Winter, 777 F.2d at 1449 n.12 (“Congress did more than acquiesce in HUD’s longstanding Found., Inc. v. Forman, 421 U.S. 837, 840–43 (1975) (internal quotation marks omitted); see also Christopher Gray, An Innovation, Packed With Artists, N.Y. TIMES, Apr. 7, 2013, at RE9 (discussing other cooperatives in New York City); Samuel G. Freeman, American Radicals as Co-op Housing Pioneers, N.Y. TIMES, Apr. 26, 2009, at C3 (same). 7 The Office of Interstate Land Sales Registration (OILSR) was formerly designated by the Secretary of HUD to administer ILSA. See Winter, 777 F.2d at 1447 n.9. Congress later transferred that function to the CFPB. See note 1, ante. 8 HUD’s reference to “completely horizontal developments” does not cast doubt on this conclusion. In context, HUD was simply explaining that ILSA’s application to “condominiums” applies not only to condominium units in multi- story buildings but also to horizontal developments and even campgrounds. 38 Fed. Reg. at 23,866. 9 interpretation; Congress took specific action in 1978 to exempt the sale of some condominiums from the Act’s scope,” implying “that, absent such an exemption, [ILSA] must apply to the sale of condominiums.”). And courts, too, “have consistently held that a ‘condominium unit’ constitutes a ‘lot.’” Becherer v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 127 F.3d 478, 481 (6th Cir. 1997). Finally, this interpretation accords with the text and purposes of ILSA. As the Court of Appeals for the Eleventh Circuit explained: [ILSA] was intended to curb abuses accompanying interstate land sales. The Act accomplishes that goal by including within it all sales of lots and then exempting a number of transactions, including sales of fully improved property. It is reasonable to conclude, as HUD did, that the term “lot” was used to refer generally to interests in realty. The legislative history supports this construction, employing the terms “lot,” “land,” and “real estate” in discussing the Act. This construction is also reasonable in terms of the purpose of the statute. A fraudulent out-of-state sale of land is not rendered any less fraudulent if the condominium form of ownership is utilized. Winter, 777 F.2d at 1448. For these reasons, we defer to the agency rule defining “lot” and to the consistent and longstanding agency understanding that this rule applies to single-floor condominium units in multi-story buildings when ownership of those units includes the right to exclusive use of those units.9 On appeal, Renaissance has not asserted any other defense to Berlin’s action to revoke the contract pursuant to 15 U.S.C. § 1703(c), see note 4, ante, and we therefore affirm the District Court’s grant of summary judgment to Berlin. 9 In doing so, we reject Renaissance’s argument that the term “land” obtains meaning by reference to state law. A state need not recognize condominium ownership as a matter of state property law, but once a state recognizes that form of property, federal law supplies “a national standard,” Bacolitsas, 702 F.3d at 682, to determine whether a condominium can be a “lot” within the meaning of ILSA. A contrary conclusion would upset the uniform application of federal law as well as the federal interest in curbing abuses in the sale of real estate. See, e.g., United States v. Kimbell Foods, Inc., 440 U.S. 715, 728 (1979) (“Undoubtedly, federal programs that by their nature are and must be uniform in character throughout the Nation necessitate formulation of controlling federal rules.” (internal quotation marks omitted)). 10 B. Renaissance also argues that the District Court erred or “abused its discretion” by awarding attorneys’ fees to Berlin. Before reaching the merits of this claim, however, we must address Berlin’s argument that we lack appellate jurisdiction to consider the District Court’s fees award because Renaissance filed a premature notice of appeal—after the entry of judgment ordering an award of particular costs and fees, but prior to the District Court’s actual calculation of that award amount.10 In the circumstances of this case, we have jurisdiction to review the District Court’s decision to award fees.11 It is true that “[a] non-quantified award of attorneys’ fees and costs is not appealable until the amount of the fees has been set by the district court,” O & G Indus., Inc. v. Nat’l R.R. Passenger Corp., 537 F.3d 153, 167 (2d Cir. 2008), and therefore Renaissance’s appeal of the fees award was premature, see FED. R. APP. P. 4(a)(1)(A) (period for filing notice of appeal starts after entry of appealable order or judgment). Nonetheless, “a premature notice of appeal from a nonfinal order may ripen into a valid notice of appeal if a final judgment has been entered by the time the appeal is heard and the appellee suffers no prejudice.” Houbigant, Inc. v. IMG Fragrance Brands, LLC, 627 F.3d 497, 498 (2d Cir. 2010) (quotation marks omitted). These two conditions have been met here. Following Renaissance’s notice of appeal, the District Court amended the judgment to account for the fees amount, see note 10, ante, and we detect no prejudice to Berlin. Accordingly, we proceed to the merits of the decision to award fees. See, e.g., LaForest v. Honeywell Int’l Inc., 569 F.3d 10 The District Court first entered judgment on April 30, 2012, awarding Berlin summary judgment on the merits along with an unspecified amount of attorneys’ fees. In an Amended Judgment, entered on May 18, 2012, the District Court adjusted the damages award to account for prejudgment interest but still did not specify precise award amounts. Renaissance filed a notice of appeal on May 30, 2012. On June 14, 2012, the District Court issued a Second Amended Judgment awarding Berlin $26,950 in attorneys’ fees and $1,194.31 in costs. Renaissance did not file a notice of appeal with respect to this Second Amended Judgment until September 21, 2012, well beyond the 30-day notice period, see FED. R. APP. P. 4(a)(1)(A), but, as we explain, the earlier notice of appeal filed on May 30, 2012, ripened upon entry of the final costs order and is therefore valid. 11 The appellants contest only the District Court’s decision to award fees—not its calculation of the fees amount. Additionally, the appellees did not file a cross-appeal contesting the District Court’s decision to limit fees to those incurred “from the date of [its] memorandum decision and order denying the defendants’ motion to dismiss on August 19, 2011 until the date of th[e] memorandum decision and order [granting summary judgment],” Dist. Ct. Op. at 15, and therefore we do not consider that issue. 11 69, 73 (2d Cir. 2009) (“Because there is now an appealable final order regarding fees and costs, that order is ripe for review.”); Iberiabank v. Beneva 41-I, LLC, 701 F.3d 916, 920–21 n.7 (11th Cir. 2012).12 ILSA provides district courts with wide discretion in fashioning a suitable monetary award. According to the statute, “[t]he amount recoverable in a suit authorized by this section may include . . . interest, court costs, and reasonable amounts for attorneys’ fees, independent appraisers’ fees, and travel to and from the lot.” 15 U.S.C. § 1709(c). The statutory authorization that a district court “may” award attorneys’ fees “‘clearly connotes discretion,’” Martin v. Franklin Capital Corp., 546 U.S. 132, 136 (2005) (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 533 (1994)), and we therefore review a district court’s decision whether to award attorneys’ fees under ILSA for abuse of discretion, see Barbour v. City of White Plains, 700 F.3d 631, 634 (2d Cir. 2012) (“We review a district court’s award of attorneys’ fees for abuse of discretion.”); see also In re Sims, 534 F.3d 117, 132 (2d Cir. 2008) (a district court abuses its discretion if it “base[s] its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence, or render[s] a decision that cannot be located within the range of permissible decisions” (internal citation and quotation marks omitted)). In this case, the District Court acted well within its discretion by awarding attorneys’ fees. In its careful and well-reasoned memorandum decision and order, the Court reasonably and correctly concluded that it has been the longstanding and unanimous view of the CFPB, HUD, and various courts that ILSA can apply to condominium units in multi-story buildings. See Part A, ante. To be sure, Renaissance’s legal argument is not frivolous; the term “land” can, in some contexts, refer specifically to the earth’s surface, and prior to this opinion we had not yet ruled directly on this question. But ILSA does not limit fee awards to circumstances where a defendant’s legal position 12 Though Rule 4(a)(4)(B)(i) of the Federal Rules of Appellate Procedure does not address this precise situation, it is consistent with treating a premature notice of appeal, filed after the entry of a judgment but before the judgment is amended to account for the specific fees award, as effective once the judgment is amended to account for the fees amount. See FED. R. APP. P. 4(a)(4)(B)(i) (“If a party files a notice of appeal after the court announces or enters a judgment—but before it disposes of any motion listed in Rule 4(a)(4)(A)—the notice becomes effective to appeal a judgment or order, in whole or in part, when the order disposing of the last such remaining motion is entered.”). 12 was entirely without merit. Cf., e.g., Martin, 546 U.S. at 138 (rejecting an argument that a discretionary fees provision should only apply “on a showing that the unsuccessful party’s position was ‘frivolous, unreasonable, or without foundation’”). We think it is enough, as the District Court explained, that the question presented “was far from an emerging or unexplored issue, but had rather been all but directly disallowed by HUD and courts within and outside of [the Southern District of New York] and [Second Circuit].” Dist. Ct. Op. at 14. In other words, Renaissance was on notice that the condominium unit at issue was a “lot” within the meaning of ILSA. On this basis, the District Court exercised reasonable judgment by concluding that Berlin should be compensated for its attorneys’ fees. CONCLUSION To summarize: (1) We afford agency deference both to the rule promulgated by the Consumer Financial Protection Bureau and the Department of Housing and Urban Development defining the statutory term “lot,” and to those agencies’ consistent and longstanding interpretation of that definition as applying to condominium units in multi-story buildings. (2) In light of this settled agency interpretation, as well as the unanimous view of courts that have considered the same issue, we also conclude that the District Court did not err or “abuse its discretion” by awarding attorneys’ fees to the plaintiffs. Accordingly, the judgment of the District Court is AFFIRMED. 13 12-2213-cv Berlin v. Renaissance Rental Partners, LLC DENNIS JACOBS, Chief Judge, dissenting: I respectfully dissent. The Berlins contracted to purchase unit 16D in one of the residential condominium towers of the Ritz-Carlton Hotel in White Plains. After the market crashed in 2008, they demanded rescission of the $1.34 million contract and return of their deposit, citing the Interstate Land Sales Full Disclosure Act (the “Land Sales Act”), 15 U.S.C. §§ 1701 et seq., which allows buyers in certain land transactions to seek rescission and a refund if the seller failed to make pre-sale filings and disclosures. The primary issue in this appeal is whether the Land Sales Act applies to this transaction. (The Berlins are certainly not invoking equity.) I The statute and its implementing regulation make clear enough that the Act governs only transactions in land (whether the interest is fee simple, a condominium, or a leasehold). See 15 U.S.C. § 1703(a)(1); Land Registration, Formal Procedures, and Advertising Sales Practices, and Posting of Notices of Suspension, 38 Fed. Reg. 23,866, 23,876 (1973) (codified at 24 C.F.R. § 1710.1). The Land Sales Act regulates only “the sale or lease of any lot.” 15 U.S.C. § 1703(a)(1). The Department of Housing and Urban Development (“HUD”) promulgated a regulation in 1973--which remains in force--that defines a “lot” as “any portion, piece, division, unit, or undivided interest in land . . . if the interest includes the right to the exclusive use of a specific portion of the land.” 24 C.F.R. § 1710.1(b) (emphasis added). HUD, which appeared amicus by brief and at oral argument, supports the Berlins, and relies chiefly on its interpretive pronouncements (and its own “intent”) to expand the regulatory scope so that HUD can regulate transactions in high-rise condominium units that do not sit on “land” and that are therefore not “lots.”1 I decline to “give effect to a reading of [the] regulations that is not the most natural one, simply because [the agency] says that it believes the unnatural reading is right.” Decker v. Nw. 1 Under Dodd-Frank, responsibility to implement the Land Sales Act shifted from HUD to the Consumer Financial Protection Bureau (“CFPB”). See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 11-203 (2010) (relevant provision codified at 12 U.S.C. § 5581). I use the term HUD here to refer to both HUD and the CFPB. HUD’s rules are enforceable by the CFPB, and the CFPB claims HUD’s regulations and interpretations as its own. See HUD Br. 1. 2 Envtl. Def. Ctr., 133 S. Ct. 1326, 1339 (2013) (Scalia, J., dissenting). The only way to read the Land Sales Act and the implementing regulation is that the Act applies only to the sale (or lease) of a lot that, by definition, includes a right to use of land that is exclusive. An exclusive right is one that excludes all others. For example, each owner in a gated community of condominiums or townhouses may have a unit that sits on land from which land the owner can exclude all the world. That is not so with Apartment 16D. Unless a condominium unit sits upon land, some portion of which is land reserved exclusively to the use of the owner, it is not a “lot” within the meaning of the statute and implementing regulation. A condominium by definition entails both an exclusive right to use a unit and a non-exclusive right to use common areas. See, e.g., Black’s Law Dictionary 336 (9th ed. 2009). So if a condominium unit sits on its own exclusive parcel of land, it is a “lot” notwithstanding that, within a development or gated community, there are amenities such as roads, clubhouses, pools, and sports facilities that are held in common by all the unit owners. By the same token, a 3 condominium unit that is a slice of a multistory residential building cannot be a “lot” of “land” within the meaning of the statute and governing regulation. What the Land Sales Act regulates is property that is or includes an exclusive interest in land; how that interest is held, whether a fee simple, a leasehold, or a condominium (for example), does not bear upon the scope of regulation. When a condominium unit is a horizontal slice of a high-rise residential building, the owner of each unit has an exclusive right to her own unit only, without any exclusive right to use of a lot on land. This is easily demonstrated. Land entails rights above and below the surface (subject of course to covenants and zoning); but the owner of 16D cannot build up or down, because (at the risk of being obvious) that expansion would oust the unit owners of 15D or 17D. Apartment 1D may be at the plane of the land, but its owner likewise cannot build up or down--so that, if (hypothetically) 1D has an exclusive outdoor patio, the owner has no right to build up from it, let alone mine it or drill for oil. At oral argument, counsel for amicus HUD argued that the very word “land” is itself “ambiguous.” True, the word 4 “land” has its nuances; so it can be said that unit 16D is “on land” as opposed to “at sea,” or “in orbit.” But the word is not ambiguous in the context of the Land Sales Act and the governing regulation. Whether what is sold is a “lot” of “land” can be grasped by any child. We look to plain meaning, and few words have a meaning as plain as “land.” Textual ambiguity cannot be manufactured by efforts of litigants and bureaucrats to distort, misunderstand, and overreach. Relying on the purported ambiguity of the word “land,” the majority opinion accedes to HUD’s view that “exclusive use of land” actually means “exclusive use of realty.” Maj. Op. at 3. The majority opinion quotes Black’s Law Dictionary 955 (9th ed. 2009): “[t]he term ‘land’ is sometimes used to mean ‘[a]n estate or interest in real property,’ a concept that ‘is not restricted to the earth’s surface, but extends below and above the surface.’” Maj. Op. at 8. True, the right to use “land” typically includes use of the air above and the earth below; but it also surely includes use of the surface. An “interest” in land may be limited to use above (air rights) or below (drilling rights), but the holder of such rights who does not also 5 have use of the surface cannot be said to have “exclusive use” of the “land,” which is the defined scope of the Land Sales Act. The fuller text of that definition (set out in the margin2) reflects that land is “immovable” and “indestructible.” Given that land is indestructible, it cannot be multiplied (or demolished). It is proverbial that they are not making any more of it. That is why a twenty- story building on a one-acre footprint does not constitute twenty acres of “land”; and at oral argument, HUD refused to say that it does, although that is the absurd conclusion compelled by HUD’s interpretation. However broad the definition of land, there is no reasonable basis for HUD’s contention that the term “land” includes any interest that may have “indicia of real estate.” See Maj. Op. 8. 2 “Ultimately, as a juristic concept, ‘land’ is simply an area of three-dimensional space, its position being identified by natural or imaginary points located by reference to the earth’s surface. ‘Land’ is not the fixed contents of that space, although, as we shall see, the owner of that space may well own those fixed contents. Land is immoveable, as distinct from chattels, which are moveable; it is also, in its legal significance, indestructible. The contents of the space may be physically severed, destroyed or consumed, but the space itself, and so the ‘land’, remains immutable.” Black’s Law Dictionary 955 (9th ed. 2009) (emphasis added) (quoting Peter Butt, Land Law 9 (2d ed. 1988)). 6 The definition of plain words should reveal meaning, not drain it, or explode it. Congress used the word “lot,” and the regulation defines “lot” as an interest that includes the “exclusive use of . . . land.” 24 C.F.R. § 1710.1(b). HUD issued “guidance” that says the word “land” includes condominiums because they “carry the indicia of and in fact are real estate.” 38 Fed. Reg. at 23,866. The majority opinion endorses the claim that the “exclusive use of land” means “exclusive use of realty.” Maj. Op. 3. But if “land” means any “realty,” we are led into a rabbit hole, because “realty” can also be defined as “property,” see Black’s Law Dictionary 1379 (9th ed. 2009), and “property” is defined as “the right to possess, use, enjoy a determinate thing,” which in turn is “[a]ny external thing over which the rights of possession, use, and enjoyment are exercised,” id. at 1335-36. That is not a useful process of definition. II Extension of the Land Sales Act to high-rise condominiums by administrative fiat is, as demonstrated, untenable as a textual matter. This was no drafting error 7 by Congress: the text is drawn to reach the evils that Congress wished to curb, and those evils did not include subjecting the Berlins to life at the Ritz-Carlton in Westchester. The Act targeted deceptive and fraudulent sales of undeveloped lots of land, transactions which (in the 1960s) were often carried out by mail or by telephone. Promoters duped unsuspecting people, often senior citizens, into purchasing, sight unseen, “land in swamps, deserts, high arid plateaus, mountains, remote valleys, jungles and lava beds.” Note, S. 275--The Interstate Land Sales Full Disclosure Act, 21 Rutgers L. Rev. 714, 714 (1967); see also Frauds & Quackery Affecting the Older Citizen: Hearing Before the Senate Special Comm. on Aging, 88th Cong. 203 (1963) (Statement of J. Fred Talley, Ariz. State Real Estate Comm’r) (referencing home-sites “so far from anywhere” that “a jackrabbit would need a canteen to get there”); id. at 183 (Statement of Sen. Goldwater, Member, Senate Special Comm. on Aging) (describing “land swindles” in Arizona where so-called “subdivisions” had no water, and in some cases, no roads or power). 8 President Johnson endorsed the Act because some senior citizens had “wasted much of their life savings on a useless piece of desert or swampland.” To Protect the American Consumer--Message from the President of the United States, H.R. Doc. No. 57, 90th Cong., 1st Sess., reprinted in 113 Cong. Rec. 3527, 3529 (Feb. 16, 1967). Shortly after its passage, the Supreme Court confirmed that the Land Sales Act was “designed to prevent false and deceptive practices in the sale of unimproved tracts of land.” Flint Ridge Dev. Co. v. Scenic Rivers Ass’n of Okla., 426 U.S. 776, 778 (1976) (emphasis added). The proper scope of the Act is illustrated by HUD’s own disclosure requirements. HUD’s regulations specify that in the property report (required by Section 1707 of the Land Sales Act) developers must disclose to buyers whether “oil, gas or mineral rights have been reserved” by the developer. 24 C.F.R. § 1710.109(b)(4). Likewise, the property report must describe the “general topography and the major physical characteristics” of the land. Id. § 1710.115(a); see also id. (requiring developer to disclose whether “any lots in the subdivision have a slope of 20% or more”); id. § 1710.115(b)-(c) (requiring developer to disclose whether 9 the lot is “covered by water” and whether the lot requires “draining or fill prior to being used”). However, since unit 16D has no subterranean resources, no slope, no wetlands, and no topographical features of any kind, such disclosure--like the Act itself--has no application to it. III At oral argument, counsel for HUD pressed us to recognize “HUD’s intention.” However, it is the intent of Congress that matters, not that of the agency. We defer to an agency only because it is presumed to have expertise in filling gaps that Congress left open, not because it has ambition to expand the limited scope of regulation Congress confided to it. See Decker, 133 S. Ct. at 1340 (Scalia, J., dissenting) (“The implied premise of this argument--that what we are looking for is the agency’s intent in adopting the rule--is false.”). HUD does not seek deference to the Land Sales Act or to HUD’s 1973 regulations; together, they actually foreclose HUD’s argument. HUD is demanding deference to its own overreading of the regulatory preamble, which says that “condominiums carry the indicia of and in fact are real 10 estate whether or not the units therein have been constructed.” 38 Fed. Reg. at 23,866 (emphasis added). But HUD’s argument begs the question whether the preamble is referencing a condominium that has exclusive use of land and is thereby on a lot. Insofar as HUD construes this guidance in a way inconsistent with its regulations, we owe it no deference. See Auer v. Robbins, 519 U.S. 452, 461 (1997). True, the agency’s reading of its own regulations need not be the best one, see Maj. Op. at 7-8; but even if the word “land” were ambiguous, HUD’s interpretation of the word is gravity-defying, literally. The majority emphasizes that HUD has “consistently maintained this understanding ever since the issue was first raised in 1969.” Maj. Op. at 9. But a misunderstanding is not improved by consistency. The majority opinion adopts the arguments made in HUD’s letter to this Court, which cites chiefly to HUD’s self- serving guidance. See HUD Br. 10. Twenty years after the regulation at issue was promulgated, the Office of Interstate Land Sales Registration (“OILSR”) purported to “streamline” the land sales registration program, and offered interpretive guidance as to some of the Land Sales Act’s exemptions. See Federal Housing Commissioner; 11 Interstate Land Sales Registration Program; Streamlining Final Rule, 61 Fed. Reg. 13,596, 13,596, 13,602 (1996). This guidance could not alter the regulation, let alone the statute itself. Indeed, the self-limited goal of the guidelines accompanying the “streamlining” was to clarify the scope of certain exemptions: “This is an interpretive rule, not a substantive regulation.” Id. at 13,601. OILSR’s streamlining guidelines defined a “lot” as “any portion, piece, division, unit, or undivided interest in land if such interest includes the right to the exclusive use of a specified portion of the land or unit. This applies to the sale of a condominium . . . as well as a traditional lot.” Id. at 13,602 (emphases added). HUD and the Berlins now rely on this “guidance” to support their expansive view, see HUD Br. 4, 9-10; but we owe no deference to HUD’s interpretive guidance if it contradicts the statute and HUD’s own regulation. See Auer, 519 U.S. at 461. In any event, this streamlining would not delink coverage under the Land Sales Act from land itself, because it is altogether unclear what, if anything, it adds. The 1973 regulation defines “lot” as any portion, piece, division, or unit of land (or undivided interest in land), 12 if--and only if--the portion, piece, division, unit, or undivided interest includes the right to “exclusive use of a specific portion of the land.” 24 C.F.R. § 1710.1(b). The 1996 guidance adds “or unit” to the second clause, which HUD argues expands coverage of the Land Sales Act to any “unit” that includes exclusive use of that unit.3 That reading is untenable. The natural way to read this addition--sloppy and incoherent as it is--is that a unit of land is a “lot” if it includes the right to exclusive use of that unit of land. That much was already clear from the 1973 regulation.4 3 Relevant portions of the 1973 regulations and the 1996 guidance are set out below: Lot means any portion, piece, division, unit, or undivided interest in land located in any State or foreign country, if the interest includes the right to the exclusive use of a specific portion of the land. 24 C.F.R. § 1710.1(h) (1973) (currently codified at 24 C.F.R. § 1710.1(b)). Lot means any portion, piece, division, unit or undivided interest in land if such interest includes the right to the exclusive use of a specific portion of the land or unit. This applies to the sale of a condominium or cooperative unit or a campsite as well as a traditional lot. 61 Fed. Reg. at 13,602 (1996). 4 The second reference to “unit,” which purportedly gives HUD authority when there is “exclusive use of 13 HUD’s ipse dixit that the definition of lot “applies to the sale of a condominium” also adds nothing. See 61 Fed. Reg. at 13,602. It goes without saying that condominium ownership (like a fee or leasehold) is one way to hold a lot of land. So the Land Sales Act may of course apply to the sale of a condominium unit on a lot of land. But it does not follow that it applies to all property held in condominium form.5 Although it plainly defined “lot” to require the exclusive use of “land,” HUD jumbles together its various semi-literate guidelines and interpretations to expand its regulatory reach. The argument that HUD spins from its a . . . unit” adds nothing because the first clause of the sentence continues to define a “lot” as a portion, piece, division, unit, or undivided interest “in land.” 5 HUD points to another regulatory guidance, from a 1974 “guideline” regarding the applicability of certain exemptions under the Land Sales Act, which references OILSR’s “‘aware[ness] of the realities of condominium construction, especially high-rise construction.’” HUD Br. 10-11 (quoting Condominium and Other Construction Contracts Guidelines, 39 Fed. Reg. 7,824, 7,824 (1974)). This “awareness” could not change the text of the Land Sales Act or of the governing regulation--which covers only exclusive interests in land. And a full reading of the 1974 guidance makes evident that it was addressing the problem of HUD property reports being delivered to potential buyers before subdivisions were even registered with HUD, giving unscrupulous developers a spurious imprimatur of HUD approval. 14 “guidance”--and that the majority opinion adopts--rests uneasily on a classic false syllogism: Land is real estate; all condominiums are real estate; therefore, all condominiums are land. 15	01-03-2023	05-06-2013
https://www.courtlistener.com/api/rest/v3/opinions/2480359/	258 F.Supp.2d 569 (2003) Shena MURPHY, Individually and as Next Friend to Terry Carter, a Minor, Plaintiff, v. FORT WORTH INDEPENDENT SCHOOL DISTRICT, et al., Defendants. No. 4:03-CV-0273-A. United States District Court, N.D. Texas, Fort Worth Division. April 24, 2003. Bobbie Ross Edmonds, Law Office of Bobbie Edmonds, Fort Worth, TX, for plaintiff. Joseph F. Cleveland, Jr., Brackett & Ellis, Fort Worth, TX, for defendant. MEMORANDUM OPINION and ORDER MCBRYDE, District Judge. On April 22, 2003, came on for trial the claims of Shena Murphy ("Murphy"), individually, and as next friend of Terry Carter (named as "John Doe" in the original petition) ("Carter") (hereinafter collectively "plaintiffs"), for procedural due process under the United States Constitution. Plaintiffs and defendants, Fort Worth Independent School District ("FWISD") and Superintendent Thomas Tocco ("Tocco"), appeared by and through their attorneys of record. Defendant Tocco also appeared in person, as did Murphy and Carter. The court, having heard and considered the evidence presented and the arguments of counsel, made certain findings of fact and conclusions of law on the record. This 570 memorandum opinion and order supplements those findings and conclusions. I. Jurisdiction The court has jurisdiction of this action. Because federal constitutional claims are being asserted, plaintiffs need not first resort to the administrative process before proceeding in this court. McNeese v. Board of Educ, 373 U.S. 668, 670-71, 83 S.Ct. 1433, 10 L.Ed.2d 622 (1963) (citing Monroe v. Pape, 365 U.S. 167, 183, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961)); Tex. Educ. Agency v. Cypress-Fairbanks Indep. Sch. Dist., 830 S.W.2d 88, 91 n. 3 (Tex.1992); Janik v. Lamar Consol. Indep. Sch. Dist., 961 S.W.2d 322, 323 (Tex. App.Houston [1st Dist.] 1997, writ denied). II. Issue At issue is whether Carter was denied his right to due process in the proceedings that led to defendant Tocco's order that Carter not be allowed to return to his home campus of Paul Laurence Dunbar High School ("Dunbar") after serving a term of ten days in an alternative education placement ("AEP"). III. Events Giving Rise to the Action[1] Carter is a seventeen-year-old male honor student. Prior to January 30, 2003, Carter attended Dunbar, his "home school" within the Fort Worth Independent School District. He ranked number six in a graduating class of 186. The number one student in the class was Allison Robinson ("Robinson"). On January 30, 2003, Carter recited and performed for extra credit an original creative rap poem in his theater arts class before his teacher, Megan Merrill, ("Merrill") and his fellow classmates. Merrill's instructions for the contest were that students could "choose to bring a song, poem, story, etc.... (must be school appropriate ... no cussing) and perform it for the class...." Merrill did not review or edit Carter's poem before his presentation. After the presentation, Merrill removed Carter from her classroom and sent him to the Vice Principal, Keith Christmas, because Robinson, one of Carter's classmates, felt threatened by words in the poem. Carter was suspended for three days, from February 3 through February 5, 2003, for an alleged offense of "terroristic threat." On February 5, 2003, Murphy, Carter, and their counsel, Bobbie Edmonds, attended a conference before hearing officer Raul Perez ("Perez"). Merrill did not appear at the hearing. 571 On February 7, 2003, Perez issued a decision requiring that Carter attend AEP for ninety school days before returning to Dunbar.[2] On that same day, Carter appealed the decision to defendant Tocco. On February 11, 2003, Dr. Carl Koch conducted an expedited risk assessment of Carter, and concluded that he posed a low risk of violence. After a review of the matter, Tocco concluded that, while inappropriate, Carter's poem was not a terroristic threat and that, therefore, Carter should only spend ten days in AEP. Accordingly, on February 12, 2003, Perez signed an amended decision, prepared at Tocco's instruction, ruling that Carter attend AEP for only ten days instead of ninety.[3] The amended decision contemplated that Carter would return to Dunbar at the end of the ten days. By letter dated February 13, 2003, Carter appealed the amended decision to the FWISD Board of Education ("Board"), complaining that (1) the amended decision recited that Carter had committed an assault, an offense not previously raised; (2) the decision needed to clarify the commencement date from which to count the ten-day period; and (3) he should not have been referred to AEP. On February 13, 2003, Carter enrolled at Metro Opportunity School ("Metro"). He successfully completed his AEP at Metro on February 28, 2003. On February 13, 2003, having learned that Carter would only attend AEP for ten days, Robinson's parents contacted one of Tocco's assistants to complain. They suggested that there had been an escalating pattern of threats by Carter against their daughter.[4] Tocco had two extended conferences with Robinson and her parents, one with a lay representative appearing for the Robinsons. He investigated their allegations by making inquiries and obtaining statements from Carter's fellow classmates and teachers. Answer at 5, ¶ 6.2.j. And, he personally interviewed two teachers. Tocco said that one recalled Robinson complaining that Carter had threatened to slap her down and kick her.[5] According to Tocco, the other teacher, Merrill, answered "yes" to Tocco's question whether Carter would present an imminent threat to Robinson if he returned to Dunbar.[6] Neither Murphy, Carter, nor their counsel was given any notice of any of those activities. The meetings and other activities took place during the time that Carter's appeal was pending before Tocco; and, Tocco was well aware that Carter was represented by counsel. Tocco explained that there was no need to discuss his investigation with Carter, because he, Tocco, had "the only evidence [he] needed." Apr. 14 tr. at 14. Tocco's consideration of the additional evidence was in violation of district policy that he would "review only the written documents and the tape recording of the [February 5] conference," Ex. notebook, tab 15 at 11, and that he "[would] not consider any evidence or testimony that 572 was not presented at the original conference." Id. As a result of having met with Robinson's parents and having considered the additional evidence obtained without notice to Carter, Tocco determined to change the February 12 ruling by denying Carter the right to return to Dunbar at the end of the ten-day AEP. But for the insistence of Robinson's parents, Tocco would never have issued the order to transfer Carter to another high school to complete his senior year. Neither Carter, nor anyone on his behalf, had any notice that such a transfer was under consideration. By letter dated February 20, 2003, Tocco issued his decision on Carter's appeal, stating that he was upholding the recommendation to place Carter in AEP for ten days, but changing the February 12 ruling to Carter's detriment by adding that Carter would not be allowed to return to Dunbar. By letter dated February 24, 2003, Carter appealed Tocco's decision to the Board. One month later, on March 25, 2003, the Board heard the appeal. Throughout that thirty-day periodindeed, from January 31, 2003, to the date of trialCarter was denied attendance at Dunbar. Before the March 25 hearing, plaintiff was cautioned that the Board would only consider evidence that had been "presented at the level below" and that it would "not take additional testimony." Ex. notebook, tab 5, "PROCEDURES FOR INDVIDUAL (NON-EMPLOYEE) COPLAINT APPEALS." Although Carter could raise any issue he wanted, the Board "[would] not consider any issues not presented and preserved at the prior level." Id. Part of the record on appeal included the information gathered ex parte by Tocco as a result of his meetings with the Robinsons. That was material that plaintiffs had never had an opportunity to attack, since it was not disclosed to their attorney until three days before the Board hearing. No issue had been preserved "below," because there was no "below" except the ex parte proceedings. Even if there had been a "prior level" at which issues would have been preserved, plaintiffs were limited to a fifteen-minute "argument" before the Board. Id. At the conclusion of the proceedings, at 11:22 p.m., the Board, voting 5-3, upheld Tocco's decision not to allow Carter to return to Dunbar. Although Carter has requested reconsideration of that decision, no hearing on the request has yet been set; and, the school district has said that the earliest it would consider the matter would be the fourth week of May, at the very end of the school year, only days before graduation. Now recognizing, as Tocco did, that it would be wrong to increase Carter's punishment after having reduced it to ten days' AEP,[7] defendants set upon a subterfuge of pretending that Carter's transfer was a wholly separate matter. For example, Bertha Whatley, the General Counsel for FWISD, testified at trial that two matters were presented to the Board on March 25, although by that time the issue of the AEP assignment was wholly moot and, in any event, non-appealable. Further, defendants' counsel referenced on several occasions § 25.034 of the Texas Education Code as giving the authority for the transfer. That statute, however, does not authorize a transfer at the request of parents other than those of the student to be transferred. (Again, Tocco made plain that that was the sole reason for the transfer.) 573 IV. Due Process Was Violated Certain procedural rights of students are clearly set forth in the student conduct code provided by FWISD. A student has the right to have his punishment determined based solely on the facts developed at the initial conference before the hearing officer. On appeal, no new information can be taken or considered. This is in keeping with a fundamental tenet of due process that a person may exercise his right of appeal without fear of increased potential punishment if he does so. Deloney v. Estelle, 713 F.2d 1080, 1083 (5th Cir.1983). Here, Carter appealed his tenday AEP assignment and the appellate judge, Tocco, increased his punishment by, in effect, giving him the death penalty by refusing to allow him to return to his home school. According to Tocco's February 20, 2003, letter, that penalty was meted "[i]n response to the appeal." And, the penalty was based on information obtained without any notice to Carter and without giving him any chance to respond. Defendants make light of the seriousness of their actions by falling back on the argument that Carter had no constitutional right to attend any particular school,[8] so they could reassign him at will with no prior notice, since he had an opportunity to have a post-transfer hearing. As the record establishes, this was not a routine reassignment, but rather one made at the insistence of the parents of another student. Section 25.033 of the Texas Education Code, upon which defendants rely, clearly refers only to "the parents" of "the student" in discussing the right to a transfer of "the student" unless "there is a reasonable basis for denying the request."[9] TEX. EDUC. CODE ANN. §§ 25.033 & 25.034(e) (Vernon 1996). Moreover, the hearing provided after the transfer had occurred was meaningless, since the Board could consider the ex parte evidence gathered against Carter, but he had no chance to present his own evidence to show how excessive a punishment his banishment from Dunbar would be. His expulsion from that school had immediate consequences, and his "right" to redress afforded him too little, and was much too late, in any event. No matter the label put on the reassignment, Carter's transfer was no different in principle from an expulsion, which affords the student a right to prior notice and a hearing "at which the student is afforded appropriate due process as required by the federal constitution." TEX. EDUC. CODE § 37.009(f) (Vernon Supp.2003). Without regard to the Texas statute, Carter was denied procedural due process. He was not told what he was accused of doing and what the basis of the accusation was. See Goss v. Lopez, 419 U.S. 565, 582, 95 S.Ct. 729, 42 L.Ed.2d 725 (1975). Nor did he have an opportunity to tell his side of the story in order to make sure that an injustice was not done.[10]Id. at 580, 95 574 S.Ct. 729. His right, fixed by district policy, to attend his home school was taken from him by a process that was unfair by any reasonable standard. By no means was the denial of Carter's right to attend his home school a de minimis or trivial deprivation. See Hassan v. Lubbock Indep. Sch. Dist, 55 F.3d 1075, 1081 (5th Cir.1995). FWISD policy gave Carter the right to attend his home school, Dunbar. Defendants arbitrarily took away that right by their actions. It goes without saying that the stigma attached to being transferred in the last months of his senior year impugned Carter's good name, reputation, honor, and integrity and had the potential to seriously damage Carter's standing with his fellow pupils and teachers as well as to interfere with later opportunities for higher education and employment. Goss, 419 U.S. at 574-75, 95 S.Ct. 729. "The fundamental requisite of due process of law is the opportunity to be heard, a right that has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to ... contest." Goss, 419 U.S. at 579, 95 S.Ct. 729 (internal quotations and citations omitted). As the Fifth Circuit has noted, standards of procedural due process are not "wooden absolutes." Keough v. Tate County Bd. of Educ., 748 F.2d 1077, 1081 (5th Cir.1984). "The sufficiency of procedures employed in any particular situation must be judged in the light of the parties, the subject matter and the circumstances involved." Id. (quoting Ferguson v. Thomas, 430 F.2d 852, 856 (5th Cir. 1970)). In this case, basic fairness and integrity, see id., required that Carter be given notice that his status as a student at Dunbar was in jeopardy.[11] V. Plaintiffs Are Entitled to Injunctive Relief Plaintiffs seek in their pleadings preliminary and permanent injunctive relief that would have the effect of requiring defendants to allow Carter to resume his education at his home school, Dunbar, and to participate in school and extracurricular activities sponsored by Dunbar. The trial of this action on the merits was consolidated with the hearing on plaintiffs' application for preliminary injunction. After having heard and considered the trial evidence, the court has concluded that nothing would be gained by going through the preliminary injunction step inasmuch as the evidence establishes that plaintiffs should prevail on the merits of their due process claim. [3] The prerequisites generally applicable for the grant of a preliminary injunction were enumerated by the Fifth Circuit in Canal Authority of State of Florida v. Callaway: The four prerequisites are as follows: (1) a substantial likelihood that plaintiff will prevail on the merits, (2) a substantial threat that plaintiff will suffer irreparable injury if the injunction is not granted, (3) that the threatened injury to plaintiff outweighs the threatened harm the injunction may do to defendant, and (4) that granting the preliminary injunction will not disserve the public interest. 489 F.2d 567, 572 (5th Cir.1974). Generally speaking, the standard for a permanent injunction is the same as the standard for a preliminary injunction except that, in the case of the former, the plaintiff must actually 575 succeed on the merits rather than to merely show, as in the case of the latter, a likelihood of success. Amoco Prod. Co. v. Village ofGambell, 480 U.S. 531, 546 n. 12, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987). The court has concluded that for equity to be served in this action, the court should grant a permanent injunction basically of the kind sought by plaintiffs. The record of the trial makes abundantly clear, and the court finds, that Carter will suffer irreparable injury if such an injunction is not granted. He would be denied, without having had his procedural due process rights recognized, the valuable right to continue his education at his home school. No form of compensation is available to Carter for the injury he would suffer if he were not to be returned in his home school for the continuation of his education. The threatened injury to Carter far outweighs any threatened harm such an injunction may do to defendants. Rather, such an injunction could have a salutary effect on defendants by providing a reminder to them that they must honor the procedural due process rights of the students in the FWISD by conducting disciplinary proceedings, or any proceeding where any valuable right of the student has the potential to be adversely affected, with the level of fairness appropriate to the threatened interests of the affected student. The injunction would not interfere with the ability of defendants to make appropriate provision for the safety of the students of the FWISD. Nothing was presented at trial that has persuaded the court that the defendants do not have the capacity to provide appropriate protection to the physical, mental, and emotional interests of both students concerned if both of them are in attendance for educational purposes at Dunbar. They were classmates at Dunbar for approximately two years without there being any interaction between the two of them that was significant enough to be called to the attention of any of the school administrators prior to the performance by Carter on January 30, 2003, of his rap poem in the drama class. Nor would the grant of such an injunction disserve the public interest. To the contrary, the interest of the public will be served by a message to defendants that they should recognize and protect the procedural due process rights of their students. Therefore, the court is granting injunctive relief to the extent provided below. VI. Plaintiffs' Request for Recovery of Attorney's Fees While plaintiffs have not expressly relied on 42 U.S.C. § 1983 as a basis for the assertion in this action of their claims under the United States Constitution, the court considers that § 1983 is the statutory basis for those claims. Therefore, there is the potential that plaintiffs will have the right to recover under the authority of 42 U.S.C. § 1988 a reasonable attorney's fee as part of the costs. Plaintiffs urge in their initial pleading that they be given judgment for reasonable attorney's fees. The court is making no ruling on the issue of attorney's fees at this time, but assumes that plaintiffs will make a formal, timely motion for attorney's fees under the authority of Rule 54(d)(2) of the Federal Rules of Civil Procedure if they wish to pursue that matter further. VII. ORDER For the reasons given on the record at the trial conducted April 22, 2003, and stated in the foregoing parts of this memorandum opinion and order, *576 The court ORDERS and DECLARES that the decision of defendants to require Carter to transfer from his home school, Dunbar, to another high school was made in violation of procedural due process rights given to Carter by the Fourteenth Amendment to the Constitution of the United States, with the result that the requirement of defendants that there be such a transfer is nugatory and of no force or effect. The court further ORDERS, and EJOINS, defendants to allow Carter to return to Dunbar for the continuation of his education and permit Carter to participate in Dunbar-sponsored activities, including extracurricular' activities. FINAL JUDGMENT Consistent with the reasons given on the record at the trial conducted April 22, 2003, in the above-captioned action and those stated in the court's memorandum opinion and order of even date herewith, The court ORDERS, ADJUDGES, DCREES, and DECLARES that the decision of defendants, Fort Worth Independent School District and Superintendent Thomas Tocco, to require plaintiff, Terry Carter, ("Carter") to transfer from his home school, Paul Laurence Dunbar High School, ("Dunbar") to another high school was made in violation of procedural due process rights given to Carter by the Fourteenth Amendment to the Constitution of the United States, with the result that the requirement of defendants that there be such a transfer is nugatory and of no force or effect. The court further ORDERS, ADJUDES, DECREES, and ENJOINS, defendants to allow Carter to return to Dunbar for the continuation of his education and permit Carter to participate in Dunbarsponsored activities, including extracurricular activities. The court further ORDERS and AJUDGES that plaintiffs have and recover from defendants, jointly and severally, costs of court incurred by plaintiffs, exclusive of attorney's fees, and that the issue of recoverability of attorney's fees as costs will be determined later if an appropriate motion is timely filed by plaintiffs. NOTES [1] The record establishes many troubling facts, e.g., Carter's teacher, Merrill, was reprimanded as a result of the January 30 incident, but Carter was not apprised of that fact; none of the teachers who heard Robinson's complaints thought that she was in danger, a fact that they would have been required to report and would have reported if any complaint had substance; the students' statements, which generally exonerate Carter, were apparently ignored by defendants; the police report generated in connection with the January 30 incident reflects that Merrill was not aware of any other major confrontations or problems between Robinson and Carter, yet Tocco said that when he questioned Merrill, she decided that Carter would be a threat to Robinson's safety if he returned to Dunbar; no formal report or complaint of any kind was generated as a result of the "smack down" incident; after the "smack down" incident, Robinson told Carter to stay away from her and he did. However, the court is not in this action considering the merits of the decision to prohibit Carter from returning to Dunbar, but only the process used to arrive at that decision. [2] Perez testified that the decision was made by a panel of five hearing officers and their supervisor. [3] The February 12 letter says that the "committee" amended the duration of the AEP. [4] The evidence discloses that there was competition between Carter and Robinson over class standing. Robinson is slated to be valedictorian. [5] This event occurred when Carter took verbal issue with Robinson and other students as they were harassing a substitute teacher in a class attended by both Carter and Robinson. The substitute teacher testified that she will be forever grateful to Carter for his intervention. [6] This teacher taught the class where Carter performed the rap poem. Her testimony at trial suggests that she thought Carter possibly could be a threat to Robinson, not that he actually was. [7] Tocco testified that had it not been for his concern about subjecting Carter to double jeopardy, his inclination would have been to increase Carter's punishment by raising the ten-day AEP to a thirty-day AEP. [8] Nevares v. San Marcos Consolidated Independent School District, the case upon which defendants rely most heavily, is distinguishable. 111 F.3d 25 (5th Cir.1997). There, no issue of procedural due process was raised. Instead, the plaintiff sought court interference before the procedures provided by Texas law had been utilized. Here, Texas law and FWISD policy provide procedures implementing a student's rights to due process under the United States Constitution that were wholly ignored by defendants. [9] In other words, the Education Code does not authorizemuch less mandate, as defendants urgethe transfer of a student upon the request of another student's parents. And, in any event, Texas statutes do not fix whether a right to due process exists under the U.S. Constitution. [10] Even if this were the type of situation where due process might be satisfied by the opportunity for a post-transfer hearing, the record establishes that such opportunity in this case was worthless. [11] No evidence was adduced at trial of any exigent circumstances making transfer without notice a necessity. Instead, Carter had heeded Robinson's earlier request that he stay away from her. And, there is no evidence of any physical altercation between her and Carter.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2519531/	174 P.3d 1133 (2007) 217 Or. App. 411 State v. Vanrenselaar. Court of Appeals of Oregon. December 26, 2007. Affirmed without opinion.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2444185/	391 S.W.2d 700 (1965) Mrs. Coleman J. McDEVITT et al., Appellants, v. James E. LUCKETT et al., Appellees. Court of Appeals of Kentucky. June 8, 1965. *701 William Friedlander, James N. Webb, Louisville, for appellants. William S. Riley, Larry A. Carver, Cyril E. Shadowen, Frankfort, E.P. Sawyer, Jefferson County Atty., Louisville, James O. Overby, Calloway County Atty., Murray, Sam F. Kibbey, Carter County Atty., Grayson, William A. Young, Franklin County Atty., Frankfort, of counsel, for appellees. CLAY, Commissioner. This action was brought by citizens and taxpayers owning intangible personal property and real estate against the Commissioner of Revenue, members of the Kentucky Board of Tax Appeals, and certain county tax commissioners for a declaration of rights. The issue was raised as to the necessity for compliance by public officials with section 172, Kentucky Constitution, and implementing statutes which relate to the assessment of property in Kentucky at its fair cash value. The plaintiffs sued as representatives of a class and requested that the defendants represent the class to which they belong. This procedural aspect of the case does not appear significant. The circuit court dismissed the original and amended complaints on the grounds that no justiciable controversy was presented, the plaintiffs had no standing to maintain the action because adequate administrative remedies were available, and the court would not undertake to control the discretion of public officials. This appeal was considered with appeals in the cases of Russman et al. v. Luckett et al., Ky., 391 S.W.2d 694, and Miller v. Layne, Ky., 391 S.W.2d 701. The opinion handed down this day in Russman et al. v. Luckett et al. disposes of all of the questions raised in this case, and that opinion is incorporated herein by reference. The judgment is reversed and the cause remanded to the Franklin Circuit Court with directions to the court to enter a judgment declaring the law as set forth in item (1) of the judgment directed to be entered in the case of Russman et al. v. Luckett et al.; and further declaring that the failure of public officials to assess all classes of property as required by section 172, Kentucky Constitution, and implementing statutes, constitutes a denial of the equal protection of the law.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2410047/	139 F. Supp. 2d 557 (2001) DISTRICT 6, INTERNATIONAL UNION OF INDUSTRIAL, Service, Transport and Health Employees and District 6 Health Fund, Plaintiffs, v. NATIONAL MEDIATION BOARD OF THE UNITED STATES OF AMERICA; National Labor Relations Board of the United States of America; Dobbs International Services, Inc., d/b/a Gategourmet; Hotel Employees & Restaurant Employees Union, AFL-CIO; and International Brotherhood of Teamsters, AFL-CIO, Defendants. No. 00 CIV. 8711 (DLC). United States District Court, S.D. New York. May 2, 2001. 558 John G. McCarthy, Cynthia M. Heaney, Bainton McCarthy & Siegel, LLC, New York City, for plaintiffs. Mary Jo White, Nicole L. Gueron, United States Attorney's Office for the Southern District of New York City, for defendant National Mediation Board of the United States of America. Eric G. Moskowitz, National Labor Relations Board, Washington, DC, for defendant National Labor Relations Board of the United States of America. Eugene F. Massamillo, Jeanine C. Driscoll, Biederman, Hoenig, Massamillo & Ruff, New York City, for defendant Dobbs International Services, Inc. John O'B. Clarke, Jr., Highsaw, Mahoney & Clarke, P.C., Washington, DC, for defendants Hotel Employees & Restaurant Employees International Union and International Brotherhood of Teamsters. OPINION AND ORDER COTE, District Judge. This case grew out of a dispute between unions that seek to represent employees working in the catering industry that serves airlines. The union that lost the right to represent these employees contends that the labor dispute should have been decided by the National Labor Relations Board ("NLRB"), and not the National Mediation Board ("NMB"), which is the federal agency charged with the responsibility for labor-management relations in the rail and air transport industries. Through an action filed on November 15, 2000, plaintiffs seek a declaratory judgment that the NMB exceeded its statutory authority by asserting jurisdiction over the employer defendant Dobbs International Services, Inc. ("Dobbs").[1] Plaintiffs also seek damages from Dobbs for breaching its collective bargaining agreement with plaintiffs, and unpaid contributions from Dobbs under the collective bargaining agreement pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA"). Defendants NMB, Dobbs, Hotel Employees & Restaurant Employees Union, AFL-CIO ("HERE"), International Brotherhood of Teamsters, AFL-CIO ("IBT"), and the NLRB move to dismiss the complaint for lack of subject matter jurisdiction. The NLRB also moves to dismiss the complaint for failure to state a claim. Should the Court determine that there is subject matter jurisdiction over this action, the plaintiffs and NMB have cross-moved for summary judgment. BACKGROUND Plaintiff District 6, International Union of Industrial, Service, Transport and 559 Health Employees ("District 6") is a labor union that represented Dobbs' employees working in Newark, New Jersey from February 1999 until June 2000. Plaintiff District 6 Health Fund is a multiemployer benefit plan established pursuant to ERISA. Defendant Dobbs provides catering services to airlines at airports throughout the United States, including Newark and Kennedy airports in the New York metropolitan area. Defendant NMB is an independent federal agency charged with labor-management relations in the rail and air transport industries under the Railway Labor Act, 45 U.S.C. § 151, et seq. ("RLA"). Defendant NLRB is an independent federal agency that administers the National Labor Relations Act, 29 U.S.C. § 151, et seq. ("NLRA"), and defendants HERE and IBT are labor unions. In the fall of 1998, District 6 won the majority of votes in an NLRB-sponsored election between District 6 and a local of HERE to determine which union would represent Dobbs' Newark employees. After the NLRB certified District 6 as the collective bargaining representative of Dobbs' Newark employees, District 6 and Dobbs entered into a collective bargaining agreement, effective February 1, 1999 through January 31, 2003. By letter dated June 8, 1999, Dobbs informed District 6 that on or about July 1, 1999, SAirGroup, would purchase Dobbs. SAirGroup is a holding company based in Zurich, Switzerland, which owns dozens of companies, including airline companies Swissair and Crossair. After SAirGroup acquired Dobbs' stock on or about July 1, 1999, District 6 continued to represent Dobbs' Newark employees. In May 2000, HERE and IBT formed an "Employee Representatives' Council" ("Council") and filed an application with NMB pursuant to Section 2, Ninth of the RLA, alleging a representation dispute among the Dobbs' kitchen, commissary, catering, and related employees. The Council requested that NMB certify the Council as the representative for all Dobbs' employees nationwide, including Dobbs' Newark employees. On May 31, 2000, District 6 filed charges against Dobbs with Region 22 of the NLRB for unfair labor practices. On August 17, 2000, the NMB ruled that Dobbs is a "carrier" for purposes of the RLA and that the NMB therefore had jurisdiction to determine which organization should represent Dobbs' employees for collective bargaining purposes.[2] On October 11, 2000, the NMB determined that 93.5 percent of Dobbs' employees had chosen to be represented by a council formed by union locals of HERE and IBT. The NMB certified this council as the representative of all of Dobbs' employees. Plaintiffs filed suit challenging both NMB determinations. DISCUSSION A. Subject Matter Jurisdiction Defendants argue that the Court lacks subject matter jurisdiction to review both the NMB's jurisdictional determination and its certification determination. A district court does have jurisdiction to review jurisdictional determinations by the NMB. The Third and Fourth Circuits have found that the NMB's jurisdiction to designate an entity a "carrier" pursuant to the RLA is judicially reviewable. Delpro Co. v. Brotherhood Ry. Carmen, 676 F.2d 960, 560 962 (3d Cir.1982); International Longshoremen's Ass'n v. North Carolina Ports Auth., 463 F.2d 1, 3 (4th Cir.1972). The Fifth Circuit has indicated its agreement with this conclusion. United States v. Feaster, 410 F.2d 1354, 1364 (5th Cir. 1969); see also Railway Labor Executives' Ass'n v. National Mediation Bd., 29 F.3d 655, 663-64 (D.C.Cir.1994) (questioning International Longshoremen's Ass'n v. National Mediation Bd., 785 F.2d 1098, 1101 (D.C.Cir.1986) (limiting judicial review to cases where the NMB has decided that it lacked jurisdiction over an entity)). A federal court also has jurisdiction to review the NMB's certification determination, but only for a gross violation of the RLA or a violation of the Constitution. Virgin Atlantic Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245, 1249-50 (2d Cir.1992). Representation disputes, "which involve controversies surrounding the designation and authorization of representatives of employees covered under the RLA, are committed to the exclusive jurisdiction of the NMB." Id. at 1250 (citation omitted). Because plaintiffs have not alleged any specific statutory or constitutional violation by the NMB there is no jurisdiction in this case over the certification determination. See also Switchmen's Union v. National Mediation Bd., 320 U.S. 297, 300-01, 64 S. Ct. 95, 88 L. Ed. 61 (1943); Horizon Air Indus., Inc. v. National Mediation Bd., 232 F.3d 1126, 1131 (9th Cir.2000). B. Summary Judgment Plaintiffs and NMB have made cross-motions for summary judgment on the issue of whether the NMB exceeded its authority in determining that Dobbs was a carrier and subject to the RLA. Plaintiffs first argue that the plain language of the RLA as amended establishes that it was not meant to apply to entities such as Dobbs that are not air carriers. A brief description of the RLA will place this issue in context. The first two general purposes of the RLA are: (1) To avoid any interruption to commerce or to the operation of any carrier engaged therein; (2) to forbid any limitation upon freedom of association among employees or any denial, as a condition of employment or otherwise, of the right of employees to join a labor organization; .... 45 U.S.C. § 151a (1976). To serve each of these goals, the NMB investigates and resolves disputes arising among a carrier's employees as to who represents such employees in labor negotiations. 45 U.S.C. § 152, Ninth. Because the RLA applies only to carriers, any company subject to the NMB's jurisdiction must fall within the definition of "carrier." The original definition, which encompassed only railroads and not airlines, reads in relevant part: The term "carrier" includes any railroad subject to the jurisdiction of the Surface Transportation Board, any express company that would have been subject to subtitle IV of Title 49, as of December 31, 1995, and any company which is directly or indirectly owned or controlled by or under common control with any carrier by railroad and which operates any equipment or facilities or performs any service (other than trucking service) in connection with the transportation, receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, and handling of property transported by railroad, and any receiver, trustee, or other individual or body, judicial or otherwise, when in the possession of the business of any such "carrier": .... 45 U.S.C. § 151, First (emphasis supplied). In 1936, Congress amended the RLA to extend coverage to common carriers by air. The RLA as amended provides: 561 All of the provisions of subchapter I of this chapter, except section 153 of this title [concerning the National Railroad Adjustment Board], are extended to and shall cover every common carrier by air engaged in interstate or foreign commerce, and every carrier by air transporting mail for or under contract with the United States Government, and every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers, subject to its or their continuing authority to supervise and direct the manner of rendition of his service. 45 U.S.C. § 181 (emphasis supplied). Finally, Section 182 explicitly defined "carrier" to include airlines. It provides: The duties, requirements, penalties, benefits, and privileges prescribed and established by the provisions of subchapter I of this chapter, except section 153 of this title, shall apply to said carriers by air and their employees in the same manner and to the same extent as though such carriers and their employees were specifically included within the definition of "carrier" and "employee", respectively, in section 151 of this title. 45 U.S.C. § 182 (emphasis supplied). Reading Sections 151, 181, and 182 together, they establish that the definition of "carrier" applies fully to air carriers. See, e.g., Air Line Stewards & Stewardesses Ass'n v. Northwest Airlines, Inc., 267 F.2d 170, 173 (8th Cir.1959). Since it is undisputed that Dobbs is under common control with an air carrier, Dobbs is also a carrier for purposes of the RLA so long as it performs any service in connection with the transportation of property by air. This interpretation is consistent with NMB's own analysis of the dispute in this case and of the statute generally. The NMB applied a two-part test to determine that it had jurisdiction in this case: First, the NMB determines whether the nature of the work is that traditionally performed by employees of rail or air carriers the "function" test. Second, the NMB determines whether the employer is directly or indirectly owned or controlled by, or under common control with a carrier or carriers the "control" test. Both parts of this test must be satisfied for the NMB to assert jurisdiction. Dobbs Int'l Servs., 27 N.M.B. 537, 544-45, 2000 WL 1297903, at 5 (N.M.B. Aug. 17, 2000). Applying this test, the NMB determined that Dobbs' employees perform work traditionally performed by airline industry employees and that Dobbs is under common control with an RLA air carrier. Dobbs, 27 N.M.B. at 545. The NMB has consistently used this analysis to determine jurisdiction. See, e.g., Ogden Aviation Servs., 23 N.M.B. 98, 104, 1996 WL 56467, at 4 (N.M.B. Feb. 5, 1996); Federal Express Corp., 23 N.M.B. 32, 75, 1995 WL 700477, at 17 (N.M.B. Nov. 22, 1995). Because the NMB's determination that Dobbs is a carrier is consistent with the statutory requirements and was based on a reasonable interpretation of the RLA, the decision will not be overturned. See Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984); Sutherland v. Reno, 228 F.3d 171, 173-74 (2d Cir.2000); Michel v. Immigration and Naturalization Serv., 206 F.3d 253, 262-63 (2d Cir. 2000). Plaintiffs next contend that the RLA is not applicable to catering companies. The RLA, however, applies quite broadly to "every air pilot or other person who performs any work as an employee or subordinate official" of an air carrier. 45 U.S.C. § 181 (emphasis supplied). Moreover, the NMB has repeatedly found the RLA applicable to in-flight caterers. See, 562 e.g., LSG Sky Chefs, Inc., 27 N.M.B. 55, 62, 1999 WL 962814, at 4 (N.M.B. Oct. 19, 1999); America West Airlines, Inc., 22 N.M.B. 54, 65-66, 1994 WL 656911, at 6 (N.M.B. Nov. 14, 1994); Nikko Inflight Catering Co., 19 N.M.B. 434, 436, 1992 WL 509792, at *2 (N.M.B. Aug. 13, 1992). In each of these decisions, the NMB found that in-flight food caterers such as Dobbs performed work traditionally performed by employees of air carriers and were covered by the RLA. It is irrelevant that the daily operations of Dobbs and its employees has not changed since SAirGroup's acquisition of Dobbs. Under the RLA the daily functions of a non-carrier's employees are relevant only to the determination of whether such functions are traditionally performed by employees in air transportation. See 45 U.S.C. § 151, First. It is similarly unnecessary to decide whether a food catering company can have an effect on airline strikes.[3] Although one of the purposes of the RLA was to prevent interruption to air commerce, see 45 U.S.C. § 151a, the existence of this potential effect is not a prerequisite to a finding that an entity is a carrier for purposes of the RLA. In sum, plaintiffs have not shown why the RLA should not apply to Dobbs. C. Remaining Motions To the extent that the plaintiffs seek a declaration that the NLRB, not the NMB, has jurisdiction over Dobbs, that request is denied, and the NLRB's motion to dismiss is granted. Plaintiffs concede that if the RLA applies to this dispute, their ERISA claim is barred by the RLA and the NMB's certification of the Council. Plaintiffs' ERISA claim is dismissed. Dobbs moves for sanctions against plaintiffs pursuant to Rule 11, Fed.R.Civ. P., and 28 U.S.C. § 1927, for filing a frivolous action. Dobbs contends that sanctions are appropriate because a reasonable inquiry into the facts and law would have revealed that plaintiffs' claims lacked an adequate legal and factual foundation. While certain arguments by plaintiffs were contrary to clear legal precedent, the Court cannot conclude that it was "objectively unreasonable" for plaintiffs to argue that Dobbs was not subject to the RLA. Margo v. Weiss, 213 F.3d 55, 64-65 (2d Cir.2000). Nor can the Court conclude that plaintiffs' claims were "so completely without merit ... that they must have been undertaken for some improper purpose such as delay." Salovaara v. Eckert, 222 F.3d 19, 35 (2d Cir.2000). CONCLUSION For the reasons stated, defendants' motions to dismiss are granted in part and denied in part. NMB's cross-motion for summary judgment is granted. Dobbs' motion for sanctions is denied. The Clerk of Court shall enter judgment for the defendants and close the case. SO ORDERED: NOTES [1] Dobbs states that its correct name is "Gate Gourmet Division Americas." [2] On September 1, 2000, Region 22 of the NLRB disclaimed jurisdiction over Dobbs, deferring to the NMB's determination that Dobbs was subject to the RLA, and not the NLRA. The NLRB declined to conduct further investigation into District 6's charge of unfair labor practices. District 6 appealed the NLRB's decision to the General Counsel of the NLRB on September 14, 2000. That appeal remains pending. [3] Plaintiffs cite Dobbs Houses, Inc. v. National Labor Relations Bd., 443 F.2d 1066, 1070 (6th Cir.1971), for the proposition that food catering companies can have no potential effect on airline strikes. Dobbs is inapposite, however, because Dobbs was not at that time controlled directly or indirectly by an air carrier, and the court held that it was therefore not a carrier for purposes of the RLA. Id. at 1072.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1838224/	546 So.2d 782 (1989) Vance H. FLOWERS, Appellant, v. STATE of Florida, Appellee. No. 88-2650. District Court of Appeal of Florida, Fourth District. July 19, 1989. Richard L. Jorandby, Public Defender, and Louis G. Carres, Asst. Public Defender, West Palm Beach, for appellant. Robert A. Butterworth, Atty. Gen., Tallahassee, and Patricia G. Lampert, Asst. Atty. Gen., West Palm Beach, for appellee. GUNTHER, Judge. We reverse the appellant's sentence and remand for resentencing pursuant to section 39.111(7), Florida Statutes (1987). We reverse the sentence imposing adult sanctions on the juvenile defendant because the trial court erred in failing to timely consider all six criteria mandated by section 39.111(7)(c), Florida Statutes (1987). The statute not only requires the trial court to consider all six criteria in determining the suitability or nonsuitability for adult sanctions before any other determination of disposition, but also requires that the decision to impose adult sanctions be in writing and in conformance with the six criteria. §§ 39.111(7)(c) and (d), Florida Statutes (1987). In the instant case, the trial court failed to consider the six criteria at the sentencing hearing before determination of disposition as required by section 39.111(7)(c). Although the trial court subsequently entered a written order with specific factual findings, such an order did not cure the trial court's error in failing to timely consider the statutory criteria. See State v. Rhoden, 448 So.2d 1013 (Fla. 1984), and Hammonds v. State, 543 So.2d 337 (Fla. 4th DCA 1989). Accordingly, we reverse the sentence and remand to the trial court to resentence the defendant. Since the trial court, upon remand, will be considering the suitability or nonsuitability of adult sanctions before imposing sentence, we note that the trial court's order provided adequate specification of the facts as to five of the six criteria enumerated in section 39.111(7)(c). However, *783 with respect to criterion 4, which addresses the juvenile's sophistication and maturity, the trial court only referred to the defendant's past criminal behavior without commenting on the juvenile's home, environmental situation, emotional attitude, and pattern of living as required by section 39.111(7)(c)4. According to Posey v. State, 501 So.2d 192 (Fla. 5th DCA 1987), simply referring to past criminal behavior is not a sufficient factual finding to support criterion 4. Thus, upon remand, the trial court should carefully reconsider criterion 4 and provide adequate specification of the facts justifying the imposition of adult sanctions. In conclusion, we reverse the sentence and remand for resentencing pursuant to section 39.111(7), Florida Statutes (1987), because the trial court did not timely consider the six criteria of section 39.111(7)(c) before imposing adult sanctions. Furthermore, we alert the trial court to the inadequacy of the specific factual findings as to criterion 4. Sentence reversed and cause remanded for resentencing. WALDEN and WARNER, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2250053/	937 F.Supp. 204 (1996) RINGLING BROS.-BARNUM & BAILEY COMBINED SHOWS, INC., Plaintiff, v. B.E. WINDOWS CORPORATION, Defendant. No. 96 Civ. 4758 (SAS). United States District Court, S.D. New York. July 11, 1996. Opinion Denying Reargument August 2, 1996. 205 Laura E. Goldbard, Stroock & Stroock & Lavan, New York City, for Ringling Bros.-Barnum & Bailey Combined Shows, Inc. Theresa M. Gillis, Jones, Day, Reavis & Pogue, New York City, for B.E. Windows Corp. OPINION AND ORDER SCHEINDLIN, District Judge. Plaintiff Ringling Bros.-Barnum & Bailey Combined Shows, Inc. ("Ringling") brings 206 this action against Defendant B.E. Windows Corporation ("B.E.") alleging violation of its rights to the trademark phrase THE GREATEST SHOW ON EARTH. Ringling has moved by Order to Show Cause for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure based upon its claims for dilution of this trademark under 15 U.S.C. § 1125(c) and § 368-d of the New York General Business Law.[1] Plaintiff asks the Court to enjoin B.E. from using the name "The Greatest Bar on Earth," which recently opened atop the World Trade Center. An evidentiary hearing was held on July 3, 1996. For the reasons discussed below, Plaintiff's motion is denied. I. Factual and Procedural Background A. Ringling and Its Mark Ringling has been in the circus and entertainment business since the 1870s and has been using the phrase THE GREATEST SHOW ON EARTH continuously from that time until the present in its advertisements, promotions and productions. Complaint ("Cplt.") ¶ 11. Ringling is the owner of several U.S. trademarks, including registrations for the use of THE GREATEST SHOW ON EARTH in television programs, t-shirts, program books, playing cards and coloring books. Id. ¶¶ 6-10. Plaintiff also owns trademarks for the well-known globe design used in conjunction with the phrase. Id. Ringling's central activity is providing circus entertainment throughout the United States; it presents approximately 1,000 shows per year in 95 cities to approximately 12 million people. Id. ¶ 12. The circus appears in the New York City metropolitan region for two months out of every year. Id. ¶ 13. Through various media outlets, the mark THE GREATEST SHOW ON EARTH is exposed to over 70 million people per year. Id. ¶ 12. Ringling heavily advertises its circus in each market where it appears, saturating the area with billboards, direct mail, and newspaper, radio and television advertisements. Cplt. ¶ 15. Plaintiff also enters into joint promotions with retailers, radio stations, governmental agencies, and manufacturers of products as varied as hair spray and frozen hamburgers. Id. ¶ 16; Plaintiff's Exhibit ("Pl.Ex.") 19. The joint agreements generally require Ringling to provide circus tickets to the co-promoters who in turn pay for print advertisements that feature their goods or services in association with "The Greatest Show on Earth." Joint promotions are subject to highly restrictive guidelines, as are Ringling's trademark licensing agreements. Cplt. ¶ 14. The phrase THE GREATEST SHOW ON EARTH is prominently used in conjunction with or as a substitute for the name "Ringling Bros."[2]Id. ¶ 15. During the past fiscal year, Ringling's advertising expenditures totalled over $19 million. Id. As part of its long-standing corporate policy, Ringling vigorously protects any abuse of its trademark. Cplt. ¶ 14. Ringling's legal department handles many incidents of possible trademark infringement each year, in an effort to protect THE GREATEST SHOW ON EARTH.[3] Testimony of Julie Alexa 207 Strauss, Ringling's Vice President and Corporate Counsel, July 3, 1996. When Ringling is notified of a possible infringement (by an employee or otherwise) it investigates and, if necessary, sends a cease and desist letter to the offending party. Id. In almost every instance, Ringling either obtains an agreement from the party to cease its use or grants a license to the party. Affidavit of Julie Alexa Strauss, June 24, 1996 ("Strauss Aff.") ¶ 9. Ringling further alleges that in an effort to preserve its family-oriented image, it does not conduct joint promotions or licensing with companies whose business involves cigarettes, sex, or alcohol. Id. However, Stephen Yaros, Ringling's New York Regional Marketing Director, testified that beer is frequently sold by concessionaires at the various arenas around the country where the circus performs. He also testified that some of Ringling's restaurant sponsors sell alcohol. B. B.E. Windows and Its Bar Defendant B.E. Windows Corporation recently opened "The Greatest Bar on Earth" on the 107th floor of the World Trade Center. Cplt. ¶ 20. The bar is the creation of Joseph Baum, widely known for his innovative restaurant creations, such as the Rainbow Room, Mama Leone's, and the original Windows on the World. Memorandum in Opposition to Plaintiff's Application for an Order to Show Cause for a Preliminary Injunction ("Opp.Mem.") at 2. B.E. claims that the bar's location works together with Baum's creative genius to entitle the bar to its designation as "The Greatest Bar on Earth." Id. at 15. It is a bar which "[c]onceptually ... is on earth but seems halfway to the moon." Id. at 2. Because of this, the bar employs a moon and stars graphic motif, which is used in conjunction with the name "The Greatest Bar on Earth" on food and drink menus. Pl.Ex. 28. More than $50,000 was invested in the design and production of the logo and collateral material used in connection with the bar's name. Declaration of David Emil, President of B.E. Windows, June 28, 1996 ("Emil Dec.") ¶ 8. C. The Present Action Toward the end of May 1996, Ringling became aware that B.E. was about to open "The Greatest Bar on Earth." On June 3, 1996, Ringling's counsel informed David Emil that B.E.'s proposed name constituted a violation of Ringling's trademark rights. Cplt. ¶ 21. A follow-up letter was sent on June 4, 1996, requesting that B.E. refrain from its planned use of the name. Id. B.E.'s counsel responded with a letter of her own, dated June 13, 1996, in which she stated her belief that "The Greatest Bar on Earth" did not infringe upon Ringling's trademark. Id. ¶ 22. Ringling sent a second letter to B.E. on June 14, reiterating its position. Id. ¶ 23. A telephone conversation between counsel for the parties took place on June 19. Upon being informed by B.E. that it planned to keep the name, Ringling issued a third warning in writing, stating clearly that Ringling intended to enforce its rights to prevent the dilution of its trademark. Id. ¶ 24. Ringling filed its Complaint on June 24, 1996. II. Legal Standards Because of the great potential for harm which may occur from the issuance of a preliminary injunction, the party seeking the injunction must sustain a heavy burden. Before an injunction may be issued, the moving party "must establish (1) irreparable injury and (2) [either] a likelihood of success on the merits, or a sufficiently serious question going to the merits and a balance of hardships tipping decidedly in the moving party's favor." Laureyssens v. Idea Group, Inc., 964 F.2d 131, 135-36 (2d Cir.1992) (emphasis in original). At this stage of the lawsuit, Plaintiff has not satisfied these criteria. Ringling seeks a preliminary injunction based only upon its claims for trademark 208 dilution. A claim for dilution can be made out under both Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c),[4] and under New York state law, N.Y.Gen.Bus.Law § 368-d.[5] The statutes are similar in several regards. First, both require that the mark have "distinctive quality." Further, both statutes state that a claim for dilution can be established regardless of whether the goods or services are in competition, and regardless of whether there exists a likelihood of consumer confusion. Additionally, both provide protection whether or not the trademark is registered. A. Federal Trademark Dilution Act of 1995 Because the Federal Trademark Dilution Act of 1995 ("the Act") was enacted just over six months ago, there is virtually no precedent upon which to rely for guidance as to its interpretation.[6] The legislative history of the Act indicates that its purpose is "to protect famous trademarks from subsequent uses that blur the distinctiveness of the mark or tarnish or disparage it, even in the absence of a likelihood of confusion." H.R.Rep. No. 374, 104th Cong., 1st Sess. 3 (1995) U.S.Code Cong. & Admin.News 1995 pp. 1029, 1030. The Act created a federal cause of action to protect trademarks from unauthorized users who "attempt to trade upon the goodwill and established renown of such marks." Id. Congress apparently thought that federal protection was necessary, given the fact that at the time of the Act's passage, only half of the fifty states had laws protecting trademarks from dilution. See 141 Cong. Rec. H14317-01, H14317 (daily ed. Dec. 12, 1995) (statement of Rep. Moorhead). Because protection was "only available on a patch-quilt system," Congress sought to discourage forum-shopping and give authority to federal courts to issue nationwide injunctions based upon trademark dilution. Id. at H14318. Members of Congress also spoke in favor of the Act as a way to assist the United States in its worldwide business efforts. See, e.g., 141 Cong.Rec. S19306-10, S19310 (daily ed. Dec. 29, 1995) (statement of Sen. Hatch); 141 Cong.Rec. S19312-01 (daily ed. Dec. 29, 1995) (statement of Sen. Leahy) ("We intend for this legislation to strengthen the hand of our international negotiators from the Office of the U.S. Trade Representative and the Department of Commerce as they press for bilateral and multilateral agreements to secure greater protection for the world famous marks of our U.S. companies."). Significantly, the Act was not intended to "pre-empt existing state dilution statutes. ... [A] federal dilution statute should ... coexist with state dilution law." H.R.Rep. No. 374, 104th Cong., 1st Sess. 4 (1995). Congress also recognized that "a mark ... [may] have acquired its fame in connection with one type of good or service ... [but can become] so famous as to be entitled to protection against dilution when 209 used on or in connection with an unrelated good or service." Id. at 8. B. New York General Business Law § 368-d New York's trademark anti-dilution statute has been on the books for many years, and thus has developed a significant amount of case law to support its application and interpretation. "In sum, the statute protects a trademark's `selling power.'" Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1030 (2d Cir. 1989) (quoting Sally Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 624-25 (2d Cir. 1983)). In order to establish a claim for dilution under New York law, two elements must be shown: (1) ownership of a distinctive mark, and (2) a likelihood of dilution. See Hormel Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497, 506 (2d Cir.1996); Sally Gee, 699 F.2d at 625. A likelihood of dilution can be founded upon a showing of either blurring or tarnishment. Tarnishment occurs when the Plaintiff's mark is used by the Defendant in association with inferior or unwholesome goods or services. See, e.g., Hormel, 73 F.3d at 507; Deere & Co. v. MTD Prods., Inc., 41 F.3d 39, 43 (2d Cir.1994). Tarnishment may result from an association with obscenity, sexual activity or illegal activity, but is not limited to seamy conduct. See Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 467 F.Supp. 366 (S.D.N.Y.), aff'd, 604 F.2d 200 (2d Cir.1979); Chemical Corp. v. Anheuser-Busch, Inc., 306 F.2d 433 (5th Cir. 1962), cert. denied, 372 U.S. 965, 83 S.Ct. 1089, 10 L.Ed.2d 129 (1963). Dilution by blurring, on the other hand, "may occur where the defendant uses or modifies the plaintiff's trademark to identify the defendant's goods or services, raising the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff's product." Deere, 41 F.3d at 43 (emphasis in original). III. Analysis A. Irreparable Injury Once a trademark has become diluted, it has lost the strength it once possessed. No matter how small the dilution, the harm has been done. Dilution has been described as the "gradual whittling away of a firm's distinctive trade-mark or name." Hormel, 73 F.3d at 506 (quoting Allied Maintenance Corp. v. Allied Mechanical Trades, Inc., 42 N.Y.2d 538, 544, 399 N.Y.S.2d 628, 369 N.E.2d 1162 (1977)). Just one whittle taken from a stick destroys the possibility that the stick can ever be made whole. As the Second Circuit has recognized, "[d]ilution is itself an injury which [cannot] be recompensed by money damages." Deere & Co. v. MTD Prods., Inc., 860 F.Supp. 113, 122 (S.D.N.Y.), aff'd, 41 F.3d 39 (2d Cir.1994) (quoting American Express Co. v. Vibra Approved Lab. Corp., 10 U.S.P.Q.2d 2006, 2013, 1989 WL 39679 (S.D.N.Y.1989)). With these authorities in mind, I have no doubt that if Ringling's trademark were diluted, that dilution would constitute irreparable harm. It make sense, therefore, to address the second prong of the preliminary injunction test, which includes a discussion of the likelihood of dilution. B. Likelihood of Success on the Merits The first part of the second prong of the preliminary injunction test is a likelihood of success on the merits. Ringling has not shown this likelihood of success under either Section 368-d of the New York General Business Law or Section 43(c) of the Lanham Act. Because the anti-dilution statutes are meant to coexist, the analysis of Plaintiff's claims is the same under either statute. 1. Ownership of a Famous Mark The first requirement for a claim of dilution is ownership of a famous mark. There is no question that Ringling owns the trademark THE GREATEST SHOW ON EARTH,[7] and that the mark is therefore entitled to protection against infringement and dilution. Further, there is little doubt 210 that the mark is protectible when used in combination with other words. See, e.g., Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Celozzi-Ettelson Chevrolet, 855 F.2d 480 (7th Cir.1988) (affirming preliminary injunction based on a dilution cause of action where defendant, though adding words to the mark, adopted plaintiff's entire slogan and a circus motif to sell used cars ("The Greatest Used Car Show on Earth")). Ringling's mark is also entitled to broad protection in the amusement or circus context. For example, if a movie theater called itself "The Greatest Circus on Earth," or a cosmetic company sold "The Greatest Clown Makeup on Earth," such uses would undoubtedly infringe Ringling's rights. In sum, THE GREATEST SHOW ON EARTH is a famous mark as contemplated by New York law and as described in the Lanham Act.[8] The next question, then, is the scope of the protection which should be accorded to Ringling as owner of the mark. I begin with the obvious. Any unauthorized use of THE GREATEST SHOW ON EARTH will dilute the mark, as the public now associates this phrase with a single source. Thus, the use of this phrase to promote a musical performance or a boxing match will inevitably result in blurring the demise of the unique identifier of Ringling's product. Similarly, any use of the phrase in the amusement or circus context (or use of that motif), even where additional words are added or a single word is substituted, would result in the dilution of Ringling's mark. However, Ringling faces an uphill battle when it attempts to protect its mark from alterations or variations outside the circus or amusement context. The question presented here is whether Ringling has the right to protect the phrase "The Greatest ____ on Earth," where the word in the blank is anything other than a circus-related word and the product does not use or relate to a circus motif.[9] In Ringling v. Celozzi-Ettelson, 855 F.2d at 482-83, the Seventh Circuit expressly noted that it was not granting Ringling a monopoly over laudatory phrases other than THE GREATEST SHOW ON EARTH.[10] The primary difficulty comes from the fact that Ringling's trademark is a common descriptive phrase, rather than a single distinctive word. Piece by piece, the phrase contains a very common article ("the"), a common adjective ("greatest"), a common noun ("show"), a common preposition ("on"), 211 and a proper noun, the name of one of the nine known planets in this solar system ("Earth"). The operative word, of course, is "show." Ringling's product is its show: a circus. That is what Ringling does, and it does not claim to do anything else. Nevertheless, through continued use across the United States for 125 years, the primarily descriptive phrase THE GREATEST SHOW ON EARTH has become a famous mark which the public at large immediately associates with the Ringling Bros.-Barnum & Bailey Circus. It is this quality of secondary meaning[11] which makes the mark capable of being protected against dilution or infringement. However, "The Greatest Bar on Earth" is not Ringling's mark. The word "bar" has nothing to do with the circus or the amusement/entertainment industry. While THE GREATEST SHOW ON EARTH is a famous mark, B.E. is not using that mark. 2. A Likelihood of Dilution The second element which must be shown in order to establish a claim for dilution is a likelihood of dilution, which may be established by a showing of either tarnishment or blurring. Ringling attempts to establish a claim for tarnishment based solely upon the fact that "The Greatest Bar on Earth" is an adult establishment where alcohol is served. Plaintiff claims that the "wholesome, family-oriented image of THE GREATEST SHOW ON EARTH is being adulterated by an association with a bar." Strauss Aff. ¶ 17. According to Ringling's own employee, however, alcohol is served at some of the venues where the circus performs, and some of Ringling's restaurant sponsors also sell alcohol. Testimony of Stephen Yaros, Ringling's New York Regional Marketing Director, July 3, 1996. Thus, there is no basis for Ringling's claim of tarnishment through association with an establishment that serves alcohol. Ringling's claim for dilution of its mark through blurring is somewhat stronger. The concept of dilution on a blurring theory has been much discussed and frequently analyzed. Blurring involves an injury to the mark's selling power, and occurs when there is a possibility that Plaintiff's mark will lose its ability to serve as a unique identifier of Plaintiff's products, due to Defendant's use of the mark. However, clear and precise standards have yet to emerge. "[B]lurring sufficient to constitute dilution requires a case-by-case factual inquiry." Mead Data, 875 F.2d at 1035 (Sweet, J., concurring). In his concurring opinion in Mead Data, Judge Sweet reviewed the Second Circuit's anti-dilution cases, and articulated a six-step analysis for considering the likelihood of dilution caused by blurring: a) similarity of the marks b) similarity of the products covered by the marks c) sophistication of consumers d) predatory intent e) renown of the senior mark f) renown of the junior mark. Id. These factors are then balanced to determine whether a likelihood of dilution by blurring exists. a. Similarity of the Marks The marks in question "must be `very' or `substantially' similar and ... absent such similarity, there can be no viable claim of dilution." Mead Data, 875 F.2d at 1029 (majority holding that there was no substantial similarity between the marks "LEXIS" and "LEXUS"). See also Hormel, 73 F.3d at 503-504 (although the marks "SPAM" and "Spa'am" are superficially similar, the context of the marks' use distinguished the marks in the consumer's mind); Stern's Miracle-Gro" Prods., Inc. v. Shark Prods., Inc., 823 F.Supp. 1077, 1091 (S.D.N.Y.1993) (finding similarity of the marks "Miracle-Gro" plant food and "Miracle Gro" hair care product); McDonald's Corp. v. McBagel's, Inc., 649 F.Supp. 1268, 1281 (S.D.N.Y.1986) (the 212 "Mc" prefix used by the parties to identify various food products sufficiently supported a claim of dilution by blurring); Toys R Us, Inc. v. Canarsie Kiddie Shop, Inc., 559 F.Supp. 1189, 1208 (E.D.N.Y.1983) (holding that the identity of the "R Us" suffixes in the toy shop context was sufficient to find blurring). At first glance, the marks at issue here appear to be similar. Each uses a five-word phrase, four of which are the same and one of which is a single-syllable word. The result is two phrases with an identical cadence. However, as discussed above, the word "show" is the most important word in Ringling's trademark. The inherent difference between the words in question, "show" and "bar," dramatically lessens the importance of the four other words which the marks have in common. The similarity is even less significant given the fact that of the four remaining words, two are so common as to be universal ("the" and "on"). A third ("Earth") is the name of our planet, for which few appropriate synonyms exist. And as noted above, "greatest" is a common laudatory superlative. In sum, Ringling has failed to demonstrate that the marks in dispute are "very" or "substantially" similar. b. Similarity of the Products Covered by the Marks Where the products sold under the marks in dispute are alike, there is a greater likelihood that blurring will occur in the mind of the consumer. For example, in Toys R Us, 559 F.Supp. at 1208, the court found that "the similarity of the children's products [toys and clothing] sold by the stores" led to a conclusion that the marks would blur the senior user's product identification. Though competition is not a factor in a dilution analysis, the closer the nature of the goods or services sold by the parties, the greater the likelihood of a loss of Plaintiff's selling power in its trademark. Here, the products of the parties are very different. Ringling presents circus entertainment across the country. B.E. operates a bar in lower Manhattan. The products covered by the marks are dissimilar, requiring a stronger showing of potential blurring than would be required if the products were similar. See generally Mead Data, 875 F.2d at 1031 ("if a mark circulates only in a limited market, it is unlikely to be associated with the mark for a dissimilar product circulating elsewhere"); Toys R Us, 559 F.Supp. at 1208 ("the similarity of the children's products sold by the stores compels me to conclude that the name Kids `r' Us is likely to blur Toys `R' Us' product identification"). c. Sophistication of Consumers Blurring is less likely where the consumers of Plaintiff's product are sophisticated. In Mead Data, 875 F.2d at 1031-32, the court held that "the recognized sophistication of attorneys, the principal users of the [LEXIS] service, has substantial relevance." The sophistication of the particular consumer group in question led the court to conclude that "it is unlikely that ... there will be any significant amount of blurring between the LEXIS and LEXUS marks." Id.; see also Sally Gee, 699 F.2d at 626 ("[s]ophisticated retailers and discerning consumers ... are unlikely to have blurred vision causing them to see `Sally Gee' upon viewing a Sally Lee label"). In this case, consumers of Ringling's product do not have a high level of sophistication. Unlike the attorneys in Mead Data, who identified the LEXIS mark with the LEXIS service and made conscious, knowledgeable decisions to purchase the product, Ringling's consumers commit no such deliberate, reflective and willful acts.[12] Given this low level of 213 sophistication of Ringling's consumers, dilution of Plaintiff's mark by Defendant's use of "The Greatest Bar on Earth" is more likely to occur. d. Predatory Intent Predatory intent "requires a showing that the junior user adopted its mark hoping to benefit commercially from association with the senior mark." Mead Data, 875 F.2d at 1037. Moreover, "[t]he absence of predatory intent by the junior user is a relevant factor in assessing a claim under the anti-dilution statute, ... since relief under the statute is of equitable origin." Id. at 1028 (quoting Sally Gee, 699 F.2d at 626) (citations omitted). See also McDonald's Corp., 649 F.Supp. at 1278-79 (defendant attempted to capitalize not only from its use of plaintiff's famous trademark, but also from the publicity generated by the litigation between the parties). In this case, Ringling has produced no evidence which would show that B.E. adopted the name "The Greatest Bar on Earth" in order to benefit commercially from the fame of the mark THE GREATEST SHOW ON EARTH. Joseph Baum, the creator of the bar, testified that he has had the concept of a spectacular bar for many years, and that he has waited a long time to see his dream of the greatest bar on Earth become a reality. Testimony of Joseph Baum, July 3, 1996. Baum further testified that he did not consider any other names for the bar, and did not recall if any other names were discussed by B.E.'s creative team. Id. However, Baum also testified that B.E. did not seek the assistance of counsel to determine if "The Greatest Bar on Earth" would infringe upon another party's trademark. Id. Baum did not know if B.E. conducted a trademark search, even after receiving notice from Ringling that the name infringed on its rights to THE GREATEST SHOW ON EARTH. Id. B.E.'s failure to inquire, through an attorney or otherwise, about any possible problems with the use of "The Greatest Bar on Earth" raises the possibility that B.E. was aware of a potential infringement, but went ahead with its plans anyway. Baum testified that he was familiar with Ringling's mark THE GREATEST SHOW ON EARTH and the mark's association with Ringling. However, he stated that nobody on the creative team thought that the bar's name would be a problem, because a bar is not a circus. Id. No evidence was offered at the hearing that would support a finding that B.E. acted with predatory intent by adopting the name "The Greatest Bar on Earth." Further discovery may yet reveal information which points to bad faith or predatory intent on the part of B.E. For the purpose of this motion, however, there is no showing of bad faith or predatory intent. e. Renown of the Senior Mark As explained above, in order to be protectible under an anti-dilution law, a trademark must possess a distinctive quality capable of dilution. Having a famous mark is important for two reasons. First, the degree of fame or national notoriety which the senior mark possesses affects the "mental associations consumers make between the two marks, which in turn bears upon the likelihood of blurring." Mead Data, 875 F.2d at 1038. Second, "a plaintiff possessing a nationally famous mark needs to focus less on other factors, such as similarity of the products or sophistication of the consumers, to establish blurring." Id. As noted above, Ringling's mark is famous. See Part III.B.1. supra. f. Renown of the Junior Mark "The Greatest Bar on Earth" is not well-known or famous. The name has no inherent distinctiveness, nor has it acquired secondary meaning. "The Greatest Bar on Earth" is merely a descriptive phrase for a bar on top of the World Trade Center. Where the fame of the junior mark is non-existent, the likelihood of finding dilution by blurring is minimal. 214 Though B.E. has not placed advertisements in the media, it has spent about $56,000 on collateral material such as brochures, gift certificates, press kits, signs and menus. Deposition of E. Sue Klein, Chief Financial Officer of B.E. Windows, July 2, 1996 at 48. B.E. also received media coverage prior to its opening. Cplt. Ex. 6. However, B.E.'s minimal expenditures and scant media coverage have not helped "The Greatest Bar on Earth" achieve any degree of fame, either nationally or in the New York metropolitan area.[13] Because it is a mark of little renown, it is unlikely that its use will cause any dilution by blurring in the minds of the public. g. Balancing the Factors It is apparent that Ringling has failed to demonstrate a likelihood of dilution by blurring. The marks in dispute are not similar, nor are the products covered by the marks. The fact that Ringling's consumer base is not sophisticated weighs in Ringling's favor, because it tends to show that Ringling's consumers are more likely to blur the marks in question. However, Ringling has not shown predatory intent on behalf of B.E., though B.E.'s failure to run a trademark search may be evidence of bad faith. Finally, Ringling's mark is nationally famous and distinctive, while B.E.'s mark has not yet achieved such notoriety. As such, blurring is unlikely to occur between Ringling's famous mark, THE GREATEST SHOW ON EARTH, and B.E.'s establishment, "The Greatest Bar on Earth." In the absence of dilution, there is no showing of irreparable harm. See Part III.A. supra. C. Sufficiently Serious Question and Balance of Hardships It is axiomatic that a preliminary injunction cannot issue in the absence of proof of irreparable harm. As just discussed, Plaintiff is unable at this time to establish a likelihood of dilution. As a result, I am unable to conclude that Plaintiff will suffer irreparable harm by reason of Defendant's use of "The Greatest Bar on Earth." I therefore conclude that it is unnecessary to address the alternative half of the preliminary injunction test namely whether Plaintiff has presented a serious question going to the merits and a balance of hardships tipping decidedly in its favor.[14] IV. Conclusion Ringling has not established irreparable harm on its dilution claims. Nor has it shown a likelihood of success on the merits or a sufficiently serious question going to the merits plus a balance of hardships tipping in its favor. Ringling has the right to protect its trademark THE GREATEST SHOW ON EARTH from dilution and infringement. For the purposes of this motion, however, Ringling has not demonstrated that its trademark rights prohibit B.E.'s use of the phrase "The Greatest Bar on Earth." For the reasons set forth above, Plaintiff's motion by Order to Show Cause for a preliminary injunction is denied. *215 On July 11, 1996, the Court denied Plaintiff's motion for a preliminary injunction. See Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. B.E. Windows Corporation, 937 F.Supp. 204 (S.D.N.Y.1996). Plaintiff now moves for reargument under Local Rule 3(j) and to alter or amend the July 11 Opinion and Order under Fed.R.Civ.P. 59(e). Alternatively, Plaintiff requests an expedited trial pursuant to Fed.R.Civ.P. 40.[1] The standard of analysis is the same for both the motion for reargument under Local Rule 3(j) and the motion for reconsideration under Fed.R.Civ.P. 59(e). See In re New York Asbestos Litigation, 847 F.Supp. 1086, 1141 (S.D.N.Y.1994). In order to prevail, the moving party must demonstrate that the Court overlooked factual matters or controlling decisions "that might materially have influenced its earlier decision." Morser v. AT & T Information Systems, 715 F.Supp. 516, 517 (S.D.N.Y.1989). This criteria will be strictly construed against the moving party. See Monaghan v. SZS 33 Assoc., LP, 153 F.R.D. 60 (S.D.N.Y.1994) (Sweet, J.). Moreover, the decision to grant or deny motions for reargument or reconsideration is within the sound discretion of the Court. See Schaffer v. Soros, 1994 WL 592891 (S.D.N.Y. Oct. 31, 1994). In support of its motion, Plaintiff raises a number of issues and arguments that were considered and rejected by the Court in its July 11, 1996 Opinion.[2] Plaintiff makes only one argument that merits any attention: Ringling asserts that the Court should not have included predatory intent as a factor in its six-part analysis of Ringling's claim of dilution under the Federal Anti-Dilution Statute, 15 U.S.C. § 1125(c)(2).[3] The language of Section 43(c)(2) indicates that predatory intent is not relevant to a claim for injunctive relief under the Federal Anti-Dilution Statute. However, the Court must still balance the five remaining factors: (1) similarity of the marks, (2) similarity of the products covered by the marks, (3) sophistication of consumers, (4) renown of the senior mark, and (5) renown of the junior mark. Even without including predatory intent in the analysis, I find that Ringling cannot demonstrate a likelihood of dilution by blurring for the reasons discussed in the July 11 Opinion. In the absence of dilution, there is no showing of irreparable harm. Plaintiff therefore does not meet the requirements necessary for the issuance of a preliminary injunction. Because Plaintiff has not shown that the Court overlooked any controlling case law or factual matters "that might materially have influenced its earlier decision," Morser, 715 F.Supp. at 517, Plaintiff's motions for reargument and reconsideration are denied. Plaintiff's request for an expedited trial will be fully addressed at the upcoming pretrial conference. SO ORDERED. NOTES [1] The Complaint contains five claims. Count I alleges a violation of the Federal Trademark Dilution Act of 1995, which added Section 43(c) to the Lanham Act, 15 U.S.C. § 1125(c). Count II is a claim for dilution under Section 368-d of the New York General Business Law. Count III alleges trademark infringement under Section 32 of the Lanham Act, 15 U.S.C. § 1114. Count IV is an action for false designation of origin and descriptions and representations arising under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Count V alleges unfair competition and trademark infringement under the common law of the State of New York. Plaintiff seeks a preliminary injunction based only upon its claims for dilution in Counts I and II. [2] Proof submitted at the hearing tended to show, however, that the trademark is rarely used alone. [3] Ringling's trademark enforcement program has targeted several variations of the mark. For example, Ringling objected to the use of the phrase "The Greatest CD on Earth" by a Chicago bank marketing its certificates of deposit. Ringling opposed the use of the name "The Greatest Game on Earth" for both souvenir baseballs and a computer video game. Additionally, Ringling has opposed the names "The Greatest Grains on Earth" (used at a food store in Davenport, Iowa); "The Greatest Water Adventure on Earth" (used by a waterslide park in Spring, Texas); "The Greatest Breakfast on Earth" (used by a restaurant in Ames, Iowa); and has filed suit in the Eastern District of Virginia against the State of Utah Division of Travel for the state's use of the phrase "The Greatest Snow on Earth" to promote Utah's world-renowned ski industry. In addition to opposing the substitution of any word in place of the word "show" in its trademark, Ringling also has opposed substitution of the word "Earth." For example, Ringling has objected to "The Greatest Show on Wheels" (used in Maine to promote a truck-pull), and "The Greatest Show on Dirt" (used in Arizona to promote a rodeo). Ringling has opposed many other variations of the mark. See, e.g., Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Celozzi-Ettelson Chevrolet, 855 F.2d 480, 481 n. 3 (7th Cir.1988). [4] The Lanham Act provides that [t]he owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark.... 15 U.S.C. § 1125(c). "Dilution" in the Act is defined as "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception." 15 U.S.C. § 1127. [5] The New York statute provides that [l]ikelihood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief in cases of infringement of a mark registered or not registered or in cases of unfair competition, notwithstanding the absence of competition between the parties or the absence of confusion as to the source of the goods or services. N.Y.Gen.Bus.Law § 368-d. [6] The only reported case which has relied upon the Act is Hasbro, Inc. v. Internet Entertainment Group, Ltd., No. C96-130WD, 1996 WL 84853 (W.D.Wash. Feb. 9, 1996). Though the court granted a preliminary injunction, its analysis was minimal, probably in light of the fact that the trademark name of plaintiff's children's board game "Candyland" was being used by defendants as the name of its sexually explicit Internet site. [7] Ringling was first granted a trademark in 1961, but claims 1891 as the date of first use, and a date of first use in interstate commerce in 1907. [8] Under Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c), [i]n determining whether a mark is distinctive and famous, a court may consider factors such as, but not limited to (A) the degree of inherent or acquired distinctiveness of the mark; (B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used; (C) the duration and extent of advertising and publicity of the mark; (D) the geographical extent of the trading area in which the mark is used; (E) the channels of trade for the goods or services with which the mark is used; (F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is being sought; (G) the nature and extent of use of the same or similar marks by third parties; and (H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register. Using these criteria as a backdrop, there is no doubt that Ringling owns a distinctive and famous mark in the phrase THE GREATEST SHOW ON EARTH. [9] An on-line search conducted in the ALLNEWS database of WESTLAW identified 2,891 references to phrases of the form "greatest ____ on earth" in the period 1985 to June 28, 1996. Declaration of James P. Jeffry ¶ 3. Most of these uses appear to be common descriptive and laudatory phrases used by the press. Under § 43(c) of the Lanham Act, use of a mark in all forms of news commentary and reporting is not actionable. [10] Defendant argues that Ringling is attempting to assert trademark protection for "The Greatest ____ on Earth." In its Reply Memorandum, Ringling denies this and asserts that this case only raises the question of whether "The Greatest Bar on Earth" dilutes Plaintiff's mark, not whether the generic "The Greatest ____ on Earth" dilutes the mark. At the hearing, however, Ringling offered testimony that although it claims that it analyzes each alleged infringing use on a case by case basis, it pursues virtually every use of "The Greatest ____ on Earth." (See note 3, supra). Nonetheless, counsel eventually agreed with the Court that Ringling wished to protect "The Greatest ____ on Earth," and "The Greatest Show on ____," arguing that if some uses were permitted, the door would be opened for all uses and the mark would be diluted. [11] Secondary meaning attaches to a mark only when "the public has learned to identify the name of the product with its source," Field Enter. Educ. Corp. v. Cove Indus., Inc., 297 F.Supp. 989, 994 (E.D.N.Y.1969), or when the mark achieves "a meaning which suggests the company to the public at the very mention of the trade name." National Color Lab., Inc. v. Philip's Foto Co., 273 F.Supp. 1002, 1003 (S.D.N.Y.1967). [12] Testimony was offered at the hearing which tended to show that Ringling distributes large amounts of free or discounted tickets to its co-promoters. Those tickets are passed along to customers of the co-promoters. Testimony also showed that in many areas across the country Ringling donates tickets to underprivileged children, who otherwise would not be able to attend the circus. Further, several of the promotions in the New York region were conducted with radio stations, which arranged for musical acts to perform in the same arena after the evening's circus performance. No proof was offered to show that the audience at the co-promoted shows was present to see the circus rather than the musical acts. In fact, testimony was given that these promotions are done in order to fill up seats on off-nights, bringing people to the circus who otherwise may not have attended. These factors combined reveal that those who attend the circus do so for a variety of reasons, only one of which may be to see THE GREATEST SHOW ON EARTH. Therefore, consumer sophistication is low. [13] The possibility that "The Greatest Bar on Earth" may someday achieve national notoriety is not relevant for the purposes of this motion. [14] If I were to fully address this issue, I would likely find that sufficiently serious questions have been presented to make them a fair ground for litigation. See Pashaian v. Eccelston Properties, Ltd., 88 F.3d 77 (2d Cir.1996). However, I would further conclude that Plaintiff has failed to show that the balance of hardships tips decidedly in its favor. In balancing the equities, as required by Section 43(c) of the Lanham Act and this test, it appears that Ringling has tolerated uses of the phrase "The Greatest ____ on Earth" for significant periods of time. The most obvious example is the State of Utah's use of "The Greatest Snow on Earth" slogan on the State's license plates. Testimony was given at the hearing which indicated that "The Greatest Snow on Earth" has been used for many years. Ringling filed a lawsuit against the Utah Division of Travel only last month. See Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. State of Utah Division of Travel, No. 96788-A (E.D.Va. filed June 6, 1996). Ringling chose not to request a preliminary injunction in that case. Ringling's harm is speculative. Ringling cannot demonstrate that the existence of Defendant's bar is causing it any harm at this time. Rather, Ringling's claim is that over time, use of "The Greatest Bar on Earth" will eventually dilute the public's association of Ringling's trademark with a single source. This matter can likely reach final resolution before any such harm occurs. [1] Familiarity with the underlying facts of this dispute is assumed. [2] These arguments are repetitive and should not have been raised again here. See Bank Leumi Trust Co. of New York v. Istim, Inc., 902 F.Supp. 46, 47-48 (S.D.N.Y.1995) (Local Rule 3(j) is strictly applied in order to "avoid repetitive argument on issues that have been fully considered by the court"). [3] Section 1125(c)(2) states that In an action brought under the subsection, the owner of a famous mark shall be entitled only to injunctive relief unless the person against whom the injunction is sought willfully intended to trade on the owner's reputation or to cause dilution of the famous mark. If such willful intent is proven, the owner of a famous mark shall also be entitled to the remedies set forth in sections 35(a) and 36, subject to the discretion of the court and the principles of equity.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2322798/	112 N.H. 458 (1972) STATE v. JOYCE E. MILLETTE. No. 6331. Supreme Court of New Hampshire. December 29, 1972. 459 Warren B. Rudman, attorney general, and Howard B. Myers, attorney (Mr. Myers orally), for the State of New Hampshire. Paul J. Liacos, of Massachusetts, and Roger B. Phillips (Mr. Liacos orally) for the defendant. R.J. Shortlidge, Jr., by brief and orally, for the New Hampshire Civil Liberties Union as amicus curiae. GRIFFITH, J. Two indictments charge the defendant with murder in the second degree, as a principal and an accomplice respectively, under the provisions of RSA 585:14 for a death allegedly resulting from a violation of RSA 585:12. A motion for particulars filed by the defendant was granted and the State then furnished a bill of particulars setting forth the acts charged. Defendant then moved to quash the indictments on numerous grounds and this was denied by the Trial Court, Flynn, J., subject to the defendant's exception. The questions of law raised by the denial were reserved and transferred by the trial court in advance of trial without objection by the State. The defendant is a medical doctor and psychiatrist licensed to practice in this State. The indictment alleging her participation in the crime as a principal states in part that she "did commit murder in the second degree in that on May 30, 1970, she did wilfully administer to a pregnant 460 woman, one Mary Ellen Cann, without legal excuse a substance with intent thereby to procure the miscarriage of such a woman thereby causing the death of Mary Ellen Cann. RSA 585:12, RSA 585:14." The indictment charging the defendant as an accomplice states that she "knowingly and wilfully for the purpose of facilitating the commission of an offense, the procurement of an illegal miscarriage, (RSA 585:12)" gave knowledge and instructions and furnished instruments to the decedent and a third person. The State's bill of particulars alleges that the decedent suffered an induced miscarriage while she was approximately three and one-half months within her term of pregnancy so that the abortion charged was of an unquickened foetus in violation of RSA 585:12, a misdemeanor. RSA 585:14, the statute upon which these indictments are based, provides that if a person causes the death of a pregnant woman by perpetrating or attempting to perpetrate either the felony of destroying a quickened foetus (RSA 585:13) or the misdemeanor of procuring the miscarriage of an unquickened foetus (RSA 585:12), "he shall be deemed guilty of murder in the second degree, and shall be punished accordingly." Among the reasons urged by defendant to quash the indictments is the following: "New Hampshire RSA ch. 585:14 upon which this indictment is also based is unconstitutional in that it renders a defendant liable to adjudication of guilt of murder in the second degree solely upon a violation of RSA ch. 585:12 where death occurs without requiring an allegation, evidence or proof of the mens rea required for the crime of murder and further subjects such a defendant to the possibility of life imprisonment based only on the intent required for a misdemeanor (RSA 585:12) which carries a maximum term of one year or a fine of one thousand dollars or both." It appears that these indictments are framed on the theory that RSA 585:14 defines a distinct homicide offense. Malice aforethought, long established as an indispensable element of the crime of murder by our cases (State v. Pike, 49 N.H. 399 (1870); State v. Greenleaf, 71 N.H. 606, 54 A. 38 (1902); State v. Nelson, 103 N.H. 478, 489, 175 A.2d 814, 822, 461 cert. denied, 369 U.S. 879, 8 L. Ed. 2d 282, 82 S. Ct. 1153 (1961)) and by our murder indictment statute (RSA 601:6), is not alleged in either indictment. In view of the structure of this State's homicide law consistently integrating, as it does, the specific measure of blameworthiness termed malice aforethought, we cannot agree that RSA 585:14 creates a separate and variant murder offense which does not include malice aforethought as an element. There were no degrees of murder at common law. Our statute on murder established degrees primarily to distinguish capital homicide and left the definition of murder to the courts. RSA 585:1; 1 Wharton, Criminal Law and Procedure s. 241 (Anderson ed. 1957). Malice aforethought is an "unjustifiable, inexcusable and unmitigrated man-endangering state-of-mind" which involves "every attitude of mind which includes (1) an intent to kill, or (2) an intent to inflict great bodily injury, or (3) an intent to do an act in wanton and wilful disregard of an unreasonable human risk (i.e. the wilful doing of a wanton act under such circumstances that there is obviously a plain and strong likelihood that death or great bodily injury may result), or (4) an intent to perpetrate a dangerous felony." Perkins, Criminal Law 46-48 (2d ed. 1969); State v. Pike, supra at 404; State v. Greenleaf, supra at 614. Mens rea in murder is more intelligibly expressed as "malice" without the addition of the word "aforethought" which adds nothing but confusion in view of the use of the statutory terms "deliberate and premeditated" in the definition of first-degree murder. See RSA 585:1; Perkins, Criminal Law, supra at 30. "[R]educed to its lowest terms, `malice' in murder, means knowledge of such circumstances that according to common experience there is a plain and strong likelihood that death will follow the contemplated act, coupled perhaps with an implied negation of any excuse or justification." Holmes, C.J., in Commonwealth v. Chance, 174 Mass. 245, 252, 54 N.E. 551, 554 (1899). The ancient ecclesiastical law of homicide harshly ruled that if a man accidently causes death because of a prohibited act, however remote from the death, the actor is liable for the death. Binavince, The Ethical Foundations 462 of Criminal Liability, 33 Fordham L. Rev. 1, 17 (1964). In the development of the common law, malice was always a necessary element in the crime of murder but in earliest times malice was imputed in all cases of homicide occurring in the commission of a felony. Moreland, Law of Homicide 14 (1952). "There has been, however, a tendency to retreat from the position that any felonious act must be murder, and rather to insist that for this result the act must be a dangerous one, assisted perhaps by the assumption that certain felonies such as arson, rape, robbery and burglary are inherently dangerous." Perkins, Alignment of Sanction with Culpable Conduct, 49 Iowa L. Rev. 325, 364 (1964); People v. Pavlic, 227 Mich. 562, 199 N.W. 373 (1924). RSA 585:1 reads as follows: "All murder committed by poison, starving, torture, or other deliberate and premeditated killing or committed in perpetrating or attempting to perpetrate arson, kidnapping, rape, robbery, or burglary, is murder of the first degree; and all murder not of the first degree is of the second degree." This statute does not make murder out of homicide occurring in the commission of certain felonies but classifies as first degree any murder committed in perpetrating these felonies. Neither the legislature nor our court ever adopted a presumption of malice from the commission of an unlawful act whether felony or misdemeanor. While language in our cases defining murder may be construed to presume malice from a homicide occurring during the commission of the named inherently dangerous felonies (State v. Pike, 49 N.H. 399 (1870); State v. Greenleaf, 71 N.H. 606, 54 A. 38 (1902); State v. Thorp, 86 N.H. 501, 171 at 633, State v. Nelson, 103 N.H. 879 (1961)) malice remains an indispensable element in the crime of murder. "Malice is not an inference of law from the mere act of killing; but like any other fact in issue, it must be found by the jury upon competent evidence." State v. Greenleaf, supra at 614. Our statute on indictments provides that it shall be sufficient in an indictment for murder to charge that "the defendant did feloniously, wilfully, and of his malice aforethought kill and murder the deceased, and in an indictment for manslaughter to charge the defendant did feloniously kill and slay the deceased." RSA 601:6. 463 The new criminal code RSA 630:1 effective November 1973, essentially restates our common-law definition of murder with greater clarity and precision. Under this statute murder is committed if a person purposely or knowingly causes the death of another or causes death under circumstances manifesting extreme indifference to the value of human life. This latter is rebuttably presumed if the actor causes death with a deadly weapon while committing, attempting to commit or in flight after committing arson, burglary or any felony against the person. RSA 626:7 II. The code substitutes a precise definition of malice in murder for the phrase "malice aforethought" and eliminates any presumption of malice from inherently dangerous felonies unless death is caused by a deadly weapon. The foregoing background of our law on homicide makes RSA 585:14 an anomaly if it is interpreted here as either directing a jury to find malice from a violation of a misdemeanor statute or dispensing with the element of malice in murder. We agree with the defendant's argument that if the former interpretation were adopted the statute might be constitutionally impermissible. State v. Lapointe, 81 N.H. 227, 123 A. 697 (1924); Wilbur v. Robbins, 349 F. Supp. 149 (D. Me. 1972). We do not reach the constitutional problem however since we are not convinced that interpretation of the statute under present conditions and in the light of our law on murder permits us to find that RSA 585:14 eliminates malice as an element of murder. Compare State v. Ryan, 70 N.H. 196, 46 A. 49 (1899). Abortion of an unquickened foetus was not a crime at common law. Only the destruction of a quick foetus was punishable and then only as a misdemeanor. Perkins, Criminal Law, supra at 140. In State v. McNab, 20 N.H. 160 (1849), an indictment brought prior to the enactment of our abortion statutes charged the accused with causing the death of a woman by means used to procure an abortive childbirth. It was held that liability for the homicide above the degree of manslaughter could not be charged where it was not alleged that there was an intent to cause the death. The crime, it was said, was distinguished from murder by the absence of malice. The only abortion homicide case reported since the original enactment of RSA 585:12, 13 and 14 in 464 Laws 1848, ch. 743 was State v. Wood, 53 N.H. 484 (1873). In Wood the deceased woman was shown to be quick at the time the abortion was performed so that the defendant's acts constituted the felony (RSA 585:13). Yet the indictment did not rely on an imputation of blameworthiness or dangerousness and expressly alleged malice aforethought. Neither of the above two cases compels any particular interpretation of RSA 585:14. Since statutes are enacted to deal with conditions in existence at the time of their enactment, we think it not improper in interpreting a statute for the first time over a century after its enactment to give some attention to the changes in conditions that have occurred in the intervening years. Defendant points out that at the time of this statute's enactment, the early cases and statutes in other jurisdictions imputing malice to cases of death resulting from abortions reflected the factual context of the era. Resting upon a premise that malice may be implied from unlawful acts dangerous to life they had a solid basis in the inherent danger of abortions at that time. See Commonwealth v. Parker, 50 Mass. 263, 265 (1845); State v. Moore, 25 Iowa 128 (1869); Smith v. State, 33 Me. 48 (1851). But cf. State v. McNab supra. Early proscription of the practice of abortion primarily sought to protect pregnant women from risks present in all surgical procedures at that time. Both hospital abortion and childbirth at full term were fraught with deadly danger. Anesthesia and bacteria were discovered only at the time that our abortion statutes were passed. Antibiotics and bloodbanks are twentieth century developments. Tietze and Lewitts, Abortion, 220 Scientific American 3 (Jan. 1969). Defendant points out that the language of our statute is taken almost literally from the 1829 New York Penal Code. Indicative of the tenor of the times was an unenacted proposal in that code making surgical operations generally a crime unless necessary to preserve life. While the foregoing may be an explanation for the language of the statute it does not require us to interpret this statute as dispensing with malice in a prosecution for murder where an unintended death resulted from commission of a misdemeanor. Holmes rudely stated "even a dog distinguishes between being stumbled over and being *465 kicked" (Holmes, The Common Law (1881)) and the universal recognition of the importance of intent permeates our system of law. Chief Justice Doe noted that "the criminal law does not generally accomplish its object by a conclusive presumption of mental guilt contrary to the fact" (Lyons v. Child, 61 N.H. 72, 73 (1881)) and we think it would be contrary to our law of murder to so interpret this statute. See Bowdler v. Company, 88 N.H. 331, 189 A. 353 (1937). The indictments here fail to allege that the defendant killed Mary Ellen Cann with malice aforethought as provided by RSA 601:6 for all murder indictments. Under these indictments the State claims the right to convict of murder without proof of the element of malice they would be required to prove in every other indictment for murder. State v. Greenleaf supra. If possible a statute will be interpreted with the presumption that the legislature intended to confine its action within constitutional bounds. State v. Lapointe, 81 N.H. at 228, 123 A. at 693. In addition a statute must be construed as part of and in harmony with the law of which it forms a part. 82 C.J.S. Statutes s. 362 (1953). We do not construe RSA 585:14 as establishing a separate crime of murder unrelated to murder as elsewhere defined but rather as establishing a degree of murder as elsewhere defined by statute and common law. The defendant is entitled to have her motion to quash granted. The State may indict and try the defendant for second-degree murder under RSA 585:14 provided it is prepared to allege and prove malice aforethought or it may indict and try the defendant for manslaughter under RSA 585:8, but it may not try the defendant under these indictments. In view of the result reached we have not considered the other grounds of the defendant for dismissal of the indictments. Defendant's exception sustained; indictments quashed. All concurred.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2017159/	628 N.E.2d 523 (1993) 256 Ill. App.3d 102 195 Ill.Dec. 59 The PEOPLE of the State of Illinois, Plaintiff-Appellee, v. Alexander McPHEE, Defendant-Appellant. No. 1-91-2908. Appellate Court of Illinois, First District, First Division. November 29, 1993. 524 Office of the State Appellate Defender, Michael J. Pelletier, Deputy Defender, Chicago 525 (Nan Ellen Foley, Asst. Appellate Defender, of counsel), for defendant-appellant. Jack O'Malley, Cook County State's Atty., of Chicago (Renee Goldfarb, Margaret J. Faustmann, Katherine S.W. Schweit, Asst. State's Attys., of counsel), for plaintiff-appellee. Justice BUCKLEY delivered the opinion of the court: Following a jury trial, defendant Alexander McPhee was found guilty of possession with the intent to deliver more than 15 and less than 100 grams of a controlled substance containing cocaine. The trial judge sentenced defendant to nine years in the Illinois State Penitentiary. On appeal, defendant argues: (1) that his sixth amendment right to effective assistance of counsel was denied by his attorney's failure to move to quash his arrest on the grounds that the police made a forcible entry and search of his wife's home while acting pursuant to a warrant which only authorized a search of a Federal Express envelope; (2) that his motion to suppress evidence should have been granted where the police officer did not have any articulable reason to suspect that the Federal Express package addressed to defendant contained contraband before seizing it for a "dog sniff"; (3) that he must be resentenced where the trial court considered in aggravation that defendant's daughter Mary, a witness to the police arrest and search of the McPhee home, testified on defendant's behalf; and (4) that he was denied a fair trial by the prosecutor's remarks in closing argument urging the jury to convict defendant in order to combat the "number one disease" of drug abuse and that "every single member of your community is a potential victim." On September 30, 1988, Detective Michael Farrant and his narcotics detection dog were assigned to the Federal Express facility at Los Angeles International Airport. According to Farrant, when his narcotics detection dog "sniffed" an envelope addressed to the defendant, the dog "alerted" to the presence of narcotics. Farrant allowed the envelope to be loaded onto a plane bound for Illinois and then he called the Chicago police department. He informed Detective Richard Boyle that a suspect package addressed to A. McPhee at 253 East 142nd Street would be arriving through Federal Express. Based upon the information provided by Farrant, Boyle prepared a complaint for a search warrant and, on October 2, 1988, Judge Bertina Lampkin signed the search warrant. The search warrant commanded that the officers search "A Federal Express Overnight Letter, measuring approximately 8½" × 11", addressed to A. McPhee, Southside Para-legal 253 East 142nd St. Dolton, Illinois." Boyle then gave the warrant to other officers to execute. Officer Chris Coleman executed the search warrant on October 3, 1988. She opened the envelope and field tested the substance within it. The test results were positive for cocaine. Coleman then repackaged the cocaine in the Federal Express envelope and handed it to Special Agent Raymond Spoon of the Federal Bureau of Investigation. The police then set up surveillance of the designated address. Spoon put on a Federal Express uniform and, driving a Federal Express van, he delivered the package to the address on the envelope. A young girl answered the door and offered to accept the package. Spoon said he needed to speak to her father. The girl disappeared and returned with Sharon McPhee, the defendant's wife. Sharon told Spoon that her husband was not home. Spoon, therefore, gave the package to her and left. Five minutes later, Coleman, Detective George Mays and another officer went to the front of the house. When they knocked on the door, they saw defendant's wife and daughter look through the front windows. Someone then opened the door a crack and the officers identified themselves. According to the testimony of both Coleman and Mays, Mays then put his foot in the door and the officers made a forcible entry into the home. Mays remained in the living room with defendant's wife and daughter while Coleman went to the back of the house. Coleman found defendant in a back office. According to Coleman, she saw in "plain view" just a few feet away from defendant a bag of white powder and a postal scale. Coleman stated that defendant then admitted that they were 526 his drugs. He was arrested and read his Miranda rights. Mays then asked defendant if he had any more drugs in the house and defendant said he had some in the bedroom. Defendant and Mays then went upstairs where Mays recovered the empty Federal Express envelope, a bag of marijuana, two vials of cocaine, and a telephone bill in Sharon McPhee's name. At trial, the defense presented the testimony of defendant, his wife and his daughter. The jury returned a verdict of guilty of possession with the intent to deliver more than 15 and less than 100 grams of a controlled substance containing cocaine. At the sentencing hearing, the judge considered the fact that defendant allowed his minor daughter to testify falsely as an aggravating factor and sentenced defendant to nine years in the penitentiary. Prior to trial, defendant filed a motion to suppress on the grounds that the Los Angeles police officer did not have probable cause or reasonable suspicion to seize the Federal Express envelope. He also challenged the warrant on the grounds that it only stated that the officers had probable cause to believe that the envelope contained cocaine. Since the drug detection dog could not differentiate between cocaine, marijuana, and heroin, defense counsel argued that the police must have opened the package prior to receiving the warrant. Defendant's pretrial motions were denied. Defendant's first contention on appeal is that he was denied his right to the effective assistance of counsel because defense counsel failed to make a pretrial motion to quash his arrest and suppress evidence on the grounds that the police forcibly entered and searched his wife's home without a proper warrant. Specifically, he asserts that the warrant the police possessed at the time of his arrest and the search of the house only authorized a search of the Federal Express envelope. He contends that since the police, in effect, made a warrantless entry and search, the court would have granted his motion to quash his arrest and suppress the evidence discovered in the search and, therefore, there is a strong probability that the result of the trial would have been different. The State argues, on the other hand, that defense counsel's failure to make such a motion was a "tactical decision" and a matter of professional judgment. The State points out that defense counsel made several other motions to suppress, called witnesses and cross-examined witnesses, pursued a defense throughout trial and objected numerous times. The State asserts that, rather than viewing specific acts or omissions of counsel, counsel's "total performance" must be evaluated in order to determine whether there has been a breakdown in the adversarial process. The State also argues that it is "absurd" for defendant to suggest that the warrant was only for the Federal Express envelope and not for the home. Finally, the State maintains that "exigent circumstances" existed which would have justified a warrantless entry. Ineffective assistance of counsel is established if defendant demonstrates that his counsel's performance fell below an objective standard of reasonableness and that, but for this substandard performance, there is a reasonable probability that the outcome of the proceeding would have been different. (Strickland v. Washington (1984), 466 U.S. 668, 687-94, 693-98, 104 S.Ct. 2052, 2064-68, 80 L.Ed.2d 674, 693-98; People v. Albanese (1984), 104 Ill.2d 504, 525, 85 Ill.Dec. 441, 450, 473 N.E.2d 1246, 1255; People v. Martin (1992), 236 Ill.App.3d 112, 120, 177 Ill.Dec. 533, 538, 603 N.E.2d 603, 608.) In order to show a "reasonable probability" that the trial result would have been affected, defendant must demonstrate more than just that his counsel's errors "had some conceivable effect on the outcome of the proceeding." (People v. Patten (1992), 240 Ill.App.3d 407, 413, 181 Ill.Dec. 278, 282, 608 N.E.2d 351, 355, citing Strickland, 466 U.S. at 693, 104 S.Ct. at 2067, 80 L.Ed.2d at 697.) Defendant must show that counsel's deficient performance was "sufficient to undermine confidence in the outcome." (Patten, 240 Ill.App.3d at 413, 181 Ill.Dec. at 282, 608 N.E.2d at 355, citing Strickland, 466 U.S. at 694, 104 S.Ct. at 2068, 80 L.Ed.2d at 698.) Therefore, a defendant is only entitled to competent, and not perfect, representation. People v. Purnell (1984), 126 527 Ill.App.3d 608, 623, 82 Ill.Dec. 87, 98, 467 N.E.2d 1160, 1171. Additionally, in order to avoid the "distorting effects of hindsight," reviewing courts indulge in a "strong presumption" that defense counsel's performance "[fell] within the wide range of reasonable professional assistance." (Patten, 240 Ill.App.3d at 413, 181 Ill.Dec. at 282, 608 N.E.2d at 355, citing Strickland, 466 U.S. at 689, 104 S.Ct. at 2065, 80 L.Ed.2d at 694.) The United States Supreme Court stated in Strickland that: "It is all too tempting for a defendant to second-guess counsel's assistance after conviction or adverse sentence, and it is all too easy for a court, examining counsel's defense after it has proved unsuccessful, to conclude that a particular act or omission of counsel was unreasonable. * * * There are countless ways to provide effective assistance in any given case. Even the best criminal defense attorneys would not defend a particular client in the same way. [Citation.]" (Patten, 240 Ill.App.3d at 414, 181 Ill.Dec. at 283, 608 N.E.2d at 356, citing Strickland, 466 U.S. at 689-90, 104 S.Ct. at 2065-66, 80 L.Ed.2d at 694-95.) Following this reasoning, Illinois courts generally have concluded that "a trial counsel's decision to file or not to file a pretrial motion is a matter of professional judgment beyond the scope of appellate review." (Martin, 236 Ill.App.3d at 121, 177 Ill.Dec. at 539, 603 N.E.2d at 609; see People v. Mendez (1991), 221 Ill.App.3d 868, 873, 164 Ill.Dec. 321, 325, 582 N.E.2d 1265, 1269; People v. Purnell (1984), 126 Ill.App.3d 608, 624, 82 Ill.Dec. 87, 98, 467 N.E.2d 1160, 1171; People v. Brittain (1976), 35 Ill.App.3d 1047, 1054, 342 N.E.2d 814, 819.) However, in several cases, Illinois reviewing courts have found ineffective assistance of counsel when the pretrial motion which counsel neglected to present was defendant's strongest defense or "patently meritorious." In People v. Stewart (1991), 217 Ill.App.3d 373, 160 Ill.Dec. 299, 577 N.E.2d 175, two police officers observed two men conversing on the sidewalk. They observed one man hand an unidentified object to the other man. When the officers approached, the men ran. After apprehending the two men, the officers discovered cocaine in defendant's possession. The Stewart court reasoned that the question of probable cause was "a close one" and the failure to file a motion to suppress could not have been "trial strategy" where defendant's only viable defense lay in contesting the propriety of the arrest. (Stewart, 217 Ill.App.3d at 376, 160 Ill.Dec. at 300, 577 N.E.2d at 176.) In People v. Downey (1990), 198 Ill. App.3d 704, 144 Ill.Dec. 833, 556 N.E.2d 300, the police entered a house without permission for the purpose of taking defendant to the police station for questioning. The officers found defendant hiding in a closet under some clothes and one of the officers had his gun out of his holster when he told defendant to exit the closet. Defendant was placed in an interrogation room and, subsequently, he confessed. The Downey court reasoned that defendant was arrested by the police, that at the time of his seizure the police clearly lacked probable cause to arrest defendant, and that there was a "reasonable probability" that his confession would have been suppressed if defense counsel had filed a pretrial motion. Moreover, the court stated that defendant's argument was "patently meritorious." Downey, 198 Ill.App.3d at 716, 144 Ill.Dec. at 840, 556 N.E.2d at 307. In this case, although it would be convenient simply to say that the failure to file a pretrial motion to quash defendant's arrest was "a matter of professional judgment beyond the scope of appellate review," we believe that, under the facts of this case, it rose to the level of ineffective assistance of counsel. The fourth amendment to the United States Constitution provides that "[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." (U.S. Const, amend IV.) In Payton v. New York (1980), 445 U.S. 573, 100 S.Ct. 1371, 63 L.Ed.2d 639, the Supreme Court held that the fourth amendment, made applicable to the states by the fourteenth amendment, prohibits the police from making 528 a warrantless, nonconsensual entry into a suspect's home for the purpose of making a routine felony arrest or search absent exigent circumstances. (See People v. Galdine (1991), 212 Ill.App.3d 472, 479, 156 Ill.Dec. 595, 600, 571 N.E.2d 182, 187; People v. Spicer (1987), 163 Ill.App.3d 81, 87, 114 Ill. Dec. 336, 341, 516 N.E.2d 491, 496.) The Payton Court reasoned that the "physical entry of the home is the chief evil against which the wording of the Fourth Amendment is directed." (Payton, 445 U.S. at 585, 100 S.Ct. at 1379, 63 L.Ed.2d at 650, citing United States v. United States District Court for Eastern District (1972), 407 U.S. 297, 313, 92 S.Ct. 2125, 2134, 32 L.Ed.2d 752, 764.) Citing to Boyd v. United States (1886), 116 U.S. 616, 625, 6 S.Ct. 524, 529, 29 L.Ed. 746, 749, the Payton Court noted that the fourth amendment arose as a response to the "hated writs of assistance" which allowed British colonial authorities "to search where they pleased for goods imported in violation of the British tax laws." The Payton Court recounted John Adams' belief that when James Otis denounced the writs as the "worst instrument of arbitrary power" because they placed the liberty of every man in the hands of every "petty officer," "[t]hen and there the child Independence was born." Payton, 445 U.S. at 584 n. 21, 100 S.Ct. at 1379 n. 21, 63 L.Ed.2d at 649 n. 21. "At the very core [of the fourth amendment] stands the right of a man to retreat into his own home and there be free from unreasonable governmental intrusion." (Payton, 445 U.S. at 590, 100 S.Ct. at 1382, 63 L.Ed.2d at 653.) Therefore, the Payton Court recognized "the long-settled premise that, absent exigent circumstances, a warrantless entry to search for weapons or contraband is unconstitutional even when a felony has been committed and there is probable cause to believe that incriminating evidence will be found within." (Emphasis added.) (Payton, 445 U.S. at 587-88, 100 S.Ct. at 1381, 63 L.Ed.2d at 651.) If an officer merely needed probable cause in order to search a suspect's home, "the provisions of the Fourth Amendment would become empty phrases, and the protection it affords largely nullified." People v. Kelley (1982), 104 Ill.App.3d 51, 53-54, 59 Ill.Dec. 844, 846, 432 N.E.2d 630, 632, citing Jones v. United States (1958), 357 U.S. 493, 497-98, 78 S.Ct. 1253, 1256-57, 2 L.Ed.2d 1514, 1518-19. Moreover, it is well established under both the United States Constitution and the Illinois State Constitution that, in order to be valid, a warrant must state with particularity the place to be searched and the persons or things to be seized. (People v. Bak (1970), 45 Ill.2d 140, 144, 258 N.E.2d 341, 343; People v. Kimmel (1966), 34 Ill.2d 578, 580-81, 217 N.E.2d 785, 787; People v. Simmons (1991), 210 Ill.App.3d 692, 696, 155 Ill.Dec. 410, 413, 569 N.E.2d 591, 594; U.S. Const., amend. IV; Ill. Const.1970, art. I, sec. 6.) The Illinois Code of Criminal Procedure also requires that a warrant " * * command the person directed to execute the same to search the place or person particularly described in the warrant and to seize the instruments, articles or things particularly described in the warrant." (Emphasis added.) Ill.Rev. Stat.1991, ch. 38, 108-7 (now 725 ILCS 5/108-7 (West 1992)). In this case, the search warrant the officers possessed when they forcibly entered defendant's home commanded that the officers search "A Federal Express Overnight Letter, measuring approximately 8½" × 11", addressed to A. McPhee, Southside Para-legal 253 East 142nd St. Dolton, IL." In addition, it commanded that they seize: "Cocaine, a schedule II Controlled Dangerous Substance. Books, records, receipts, notes, ledgers, and other documents relating to transporting, ordering, purchasing and distributing controlled substances. Also Indicia of occupancy, residency and related narcotic paraphernalia." The State argues that it is absurd to suggest that this search warrant was limited in its scope to only the Federal Express envelope. The State points to the language describing the things to be seized and asserts that the warrant clearly sought more than the drugs in the envelope. The State then asks: "why would the police officers have allowed the envelope to be accepted inside the house if they did not have a search warrant for the house?" 529 Suffice it to say, on its face, the warrant the police possessed did not command that the house at 253 East 142nd Street in Dolton, Illinois be searched. The warrant only commanded that a Federal Express package be searched. Even assuming we accept the State's assertions that the warrant clearly illustrates that the officers contemplated searching the house, this warrant does not satisfy the requirement of both the State and Federal constitutions that a warrant must particularly describe the place to be searched. The State also contends that, even if the warrant did not include the home within its purview, the search was justified by exigent circumstances and cites People v. Eichelberger (1982), 91 Ill.2d 359, 63 Ill.Dec. 402, 438 N.E.2d 140, for this proposition. Eichelberger, however, is distinguishable. In Eichelberger, the arresting officer could hear through the open door of defendant's hotel room what he reasonably believed to be a drug transaction taking place within the room. The Eichelberger court held that "[t]he fact that the officers reasonably believed that a felony was being committed in their presence demanded prompt police action and constituted an exigent circumstance which justified the warrantless entry into the hotel room and the arrest." In this case, no such prompt police action was mandated. The police already had a warrant for the Federal Express envelope and could have easily included the residence in this warrant. Anticipatory warrants are constitutional. (Galdine, 212 Ill.App.3d at 480, 156 Ill.Dec. at 601, 571 N.E.2d at 188.) Although defendant was suspected of a drug offense, he is "no less entitled to [fourth amendment] protection than those suspected of nondrug offenses." United States v. Karo (1984), 468 U.S. 705, 717, 104 S.Ct. 3296, 3304, 82 L.Ed.2d 530, 543. The State also argues that the entry was constitutional under the "good faith" exception to the warrant requirement announced in United States v. Leon (1984), 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677. The Leon Court noted that the exclusionary rule was a judicially created remedy designed to deter police misconduct and thus safeguard fourth amendment rights. Therefore, the Leon Court reasoned that no purpose is served by excluding evidence which is unconstitutionally seized by an officer who acted with reasonable good faith in reliance upon a defective warrant which was issued by a "neutral and detached magistrate." Consequently, the Leon Court held that when officers act in objective good faith and "within the scope" of a facially valid warrant which is subsequently determined to be defective (i.e., not supported by probable cause), the evidence seized should not be excluded. The police actions here do not fall within the Leon "good faith" exception, however, because the warrant at issue was not legally defective. The police had a valid warrant; they simply acted outside of its scope. Therefore, if defense counsel had filed a pretrial motion to quash defendant's arrest and suppress the evidence seized as a result of the unconstitutional entry, the outcome would have been different. The court would have had to exclude all the evidence which was seized as a result of the unconstitutional entry. Consequently, the State would have had to forego defendant's prosecution because it would have had no evidence. We conclude that failure to file this pretrial motion was ineffective assistance of counsel. This argument was "patently meritorious" and the strongest argument defendant could have presented. Moreover, "[f]reedom from intrusion into the home or dwelling is the archetype of the privacy protection secured by the Fourth Amendment" (Payton, 445 U.S. at 587, 100 S.Ct. at 1380, 63 L.Ed.2d at 651) and defense counsel should be particularly sensitive to challenging this type of violation. Otherwise, the principal protection provided by the fourth amendment will have been nullified and, in the defendant's case, would have become nothing more than an "empty phrase." Jones, 357 U.S. at 498, 78 S.Ct. at 1257, 2 L.Ed.2d at 1519. We also agree with defendant's second contention that the Federal Express envelope was unconstitutionally seized from the Federal Express facility at the Los Angeles 530 airport without the requisite reasonable suspicion that it contained narcotics. Los Angeles police detective Michael Farrant testified that, on September 30, 1988, he and his narcotics detection dog were assigned to the Federal Express facility at Los Angeles International Airport. Farrant testified that he "went through" approximately 100 packages before coming to the envelope addressed to defendant. He explained that he was looking for packages which were not delivered by truck or courier, were paid for in cash with handwritten airbills and were going from one individual to another. He admitted that other than these characteristics of the envelope there was nothing unusual about it. He stated that he then "took possession of [the envelope]" and locked it in the cab of his police car while he set up a controlled environment for a "dog sniff." He said that first he found a cart with boxes on it and had his police detection dog check the cart. The dog did not alert to any of the boxes on the cart. He then retrieved the package from his police car and placed it on the cart with the other boxes. According to his testimony, the envelope had been in the car approximately 20 minutes. When the dog sniffed the cart with the envelope on it, the dog became agitated and began to scratch the envelope. He stated that he stayed with the package until a Federal Express employee put it in a bag and placed it on a plane bound for Illinois. He then called the Chicago police and asked them to accept the package and continue the investigation. The fourth amendment protects the "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." (Emphasis added.) (U.S. Const., amend. IV.) The Federal Express envelope "was unquestionably an `effect' within the meaning of the Fourth Amendment." (United States v. Jacobsen (1984), 466 U.S. 109, 114, 104 S.Ct. 1652, 1657, 80 L.Ed.2d 85, 94 ("Letters and other sealed packages are in the general class of effects in which the public at large has a legitimate expectation of privacy.").) Subjecting packages located in a public place to a "canine sniff," however, does not constitute a "search" under the fourth amendment. (United States v. Place (1983), 462 U.S. 696, 707, 103 S.Ct. 2637, 2645, 77 L.Ed.2d 110, 121.) Additionally, a package is "seized" by governmental authorities when they "exert dominion and control over the package for their own purposes." (Jacobsen, 466 U.S. at 121 n. 18, 104 S.Ct. at 1660 n. 18, 80 L.Ed.2d at 99 n. 18.) Therefore, although the Federal Express envelope clearly falls under the ambit of fourth amendment protections, subjecting it to a "dog sniff" was not an unconstitutional search. When Farrant "took possession of it" and placed it in his locked police car, however, he had clearly seized the envelope and thus implicated the fourth amendment. Consequently, the issue is whether this seizure was unconstitutional. Defendant asserts that the characteristics of the envelope which Farrant stated caused him to seize it were not sufficient to give him "reasonable suspicion" that the envelope contained narcotics. Defendant points out that the trial judge agreed with him that Farrant did not possess reasonable suspicion. The trial judge denied his motion, however, because he believed that under principles of bailment law Federal Express had a right to transfer possession of the envelope to the police. The trial judge was incorrect as to the applicable law and we agree with defendant that his motion to suppress should have been granted. The general rule is that the seizure of personal property is per se unreasonable "unless it is accomplished pursuant to a judicial warrant issued upon probable cause and particularly describing the items to be seized." (Place, 462 U.S. at 701, 103 S.Ct. at 2641, 77 L.Ed.2d at 116-17.) In Place, however, the United States Supreme Court held that important law enforcement interests could support a seizure of personal property based on less than probable cause "[w]hen the nature and extent of the detention are minimally intrusive of the individual's Fourth Amendment interests." (Place, 462 U.S. at 703, 103 S.Ct. at 2642, 77 L.Ed.2d at 118.) Specifically, the Place Court concluded that the constitutional limitations applicable to investigatory stops under Terry v. Ohio (1968), 392 U.S. 1, 21, 88 S.Ct. 1868, 1880, 20 L.Ed.2d 889, 906, which permit the detention 531 of a person if an officer has reasonable suspicion of criminal activity based on specific, articulable facts define the permissible scope of an investigative detention of personal property on less than probable cause. Place, 462 U.S. at 702, 103 S.Ct. at 2642, 77 L.Ed.2d at 117. Clearly, this lesser standard of "reasonable suspicion" would be appropriate in this case in light of the fact that no privacy interest, possessory interest or liberty interest was invaded by the seizure. (See Place, 462 U.S. at 708, 103 S.Ct. at 2645, 77 L.Ed.2d at 121; United States v. Van Leeuwen (1970), 397 U.S. 249, 253, 90 S.Ct. 1029, 1032, 25 L.Ed.2d 282, 286.) However, we do not believe that the facts known to Detective Farrant were sufficient to justify a seizure even under this lesser standard. Farrant testified that he seized the package based upon the following information: (a) the package was not delivered by truck or courier, (b) it was paid for in cash, (c) it had a handwritten airbill, and (d) it was going from one individual to another. He admitted that other than these characteristics of the envelope there was nothing unusual about it. We do not believe that these facts alone were sufficient to support a reasonable, articulable suspicion that the Federal Express envelope contained contraband. We also believe it appropriate to condemn the trial judge's use of defendant's daughter's testimony in aggravation when he sentenced defendant. The record shows that defendant had a prior conviction in 1981 for possession of marijuana for which he was sentenced to one year of probation. At the sentencing hearing, the trial judge stated that he would not count the conviction "of much significance" because it was in 1981 and, in the view of the sentencing judge, not a significant crime. The trial judge then stated that, according to his recollection, the cocaine found in defendant's possession was 94% to 96% pure and, therefore, carried a "potential for substantial harm for the public." (A review of the record shows, however, that the relative purity of the narcotics seized from the McPhee home was not in evidence. As a matter of fact, the chemist stated during examination that she did not test the level of purity.) Nonetheless the judge asserted that he would not consider the drug's purity level or its danger of harm to others in aggravation because the legislature considered the public danger when it imposed a minimum six year prison sentence. The judge then stated: "The matter that I do find aggravating is the testimony of the Defendant's eleven year old daughter. The Defendant testified falsely even though that could be used as matters to consider when imposing sentence. The Defendant committed perjury and make no mistake, that's what I believe is the facts. That may be taken into consideration in imposing sentence. United States v. Grayson, G-R-A-Y-S-O-N, 438 U.S. 41 [98 S.Ct. 2610, 57 L.Ed.2d 582]. I don't and I won't in this case but in my view, having the eleven year old daughter of the Defendant testify involving her perjury, what I believe is blatant perjury, that's an aggravating factor. That is a serious aggravating factor. It's not in the statute but I believe I can take it into account as other matters and I think that this is of such a nature that I will take this into account. To impose upon that eleven year old daughter to the extent where she testifies and testifies falsely, in my view, is shameful and reprehensible. Are these proceedings to be taken so lightlythat the defendant can take them so lightly or that the Defendant doesn't take it serious is perhaps excusable because of the stakes that confront him and he has a right to defend himself. To have his daughter testify in my view can have serious consequences for her and I think that is a tragedy." The judge then sentenced defendant to nine years incarceration in the Illinois State Penitentiary. The sentencing of a defendant is a matter of judicial discretion and, if within statutory limits, we will not disturb a defendant's sentence unless the trial judge abused his discretion. (People v. Banks (1993), 241 Ill.App.3d 966, 981, 182 Ill.Dec. 330, 340, 609 N.E.2d 864, 874.) However, it has been held that consideration of an improper factor in 532 aggravation affects a defendant's liberty interest and constitutes an abuse of discretion which mandates the defendant's resentencing unless "the factor is an insignificant element of the defendant's sentence." (People v. Joe (1991), 207 Ill.App.3d 1079, 1085, 152 Ill.Dec. 924, 930, 566 N.E.2d 801, 807.) In this case, the fact that defendant's daughter testified was the major aggravating factor contributing to defendant's nine-year sentence. There are several reasons why it was improper for the trial judge to consider as an aggravating factor the fact that he believed defendant's minor daughter testified falsely on defendant's behalf. First, when sentencing a defendant, it is improper to consider the conduct of another person in aggravation. (Joe, 207 Ill.App.3d at 1087, 152 Ill.Dec. at 931, 566 N.E.2d at 808; People v. Varela (1990), 194 Ill.App.3d 357, 363, 141 Ill.Dec. 325, 329, 551 N.E.2d 318, 322.) In both Joe and Varela, it was held improper to consider in aggravation that defendants allowed their brothers to get involved in their offenses. In both cases, there was no evidence that it was at the defendants' urging that their brothers participated in the crimes. Similarly, in this case, there was no evidence that defendant urged his daughter to perjure herself. Additionally, other than the fact that the judge did not believe her story, it has not been established that she committed perjury; a separate hearing would have to be held on this issue. In fact, her story was not identical to defendant's testimony and supported the State's case in several respects. Even assuming that this case is distinguishable from Joe and Varela, however, because defendant's daughter was a minor unlike the defendants' brothers in Joe and Varela, defendant still prevails. A defendant has a constitutional right to present witnesses in his defense at trial. (Taylor v. Illinois (1988), 484 U.S. 400, 408-09, 108 S.Ct. 646, 652-53, 98 L.Ed.2d 798, 810; People v. Manion (1977), 67 Ill.2d 564, 576, 10 Ill.Dec. 547, 553, 367 N.E.2d 1313, 1319.) It is improper for a sentencing judge to impose a harsher sentence upon a defendant because the defendant exercised his constitutional rights. (People v. McCumber (1985), 132 Ill.App.3d 339, 345, 87 Ill.Dec. 548, 552, 477 N.E.2d 525, 529.) Although the trial judge stated he was considering defendant's daughter's "perjured" testimony in aggravation because it reflects on defendant's moral character, we believe that to allow a judge to consider such a factor would have the effect of chilling a defendant's full exercise of his constitutional rights. In this case, defendant's minor daughter witnessed his arrest. He had a constitutional right to present her testimony. It would be an impermissible encroachment upon this right if a judge were allowed to consider as an aggravating factor the fact that he presented a minor's testimony in support of his unsuccessful defense. Otherwise, any time a defendant offers a minor's testimony in support of his defense and he is convicted, he will be subject to a harsher sentence for doing so. Thus, in effect, he will be impermissibly penalized for exercising his constitutional rights. In light of our disposition of this case, we need not address defendant's final contention that certain comments by the prosecutor during closing argument deprived him of a fair trial. For the foregoing reasons, the judgment of the circuit court of Cook County is reversed. Reversed. MANNING, P.J., and O'CONNOR, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2017184/	352 B.R. 693 (2006) In re James and Linda MORGAN, James and Linda Morgan, Plaintiffs, v. Jo-Ann Goldman, Chapter 13 Trustee; Bank of America; et al., Defendants. Bankruptcy No. 5:03-BK-12580M, Adversary No. 5:05-ap-1244. United States Bankruptcy Court, E.D. Arkansas, Pine Bluff Division. October 3, 2006. 694 695 G. Gregory Niblock, Jeremy Bueker, Niblock & Associates, Stuttgart, AR, Steven W. Abed, Gary Eubanks & Associates, Little Rock, AR, for Plaintiffs. Jo-Ann L. Goldman, Trustee Debtor Estates, Little Rock, AR, for Defendants. MEMORANDUM OPINION JAMES G. MIXON, Bankruptcy Judge. On August 30, 2005, James and Linda Morgan ("Debtors") filed the above-captioned adversary proceeding against Jo-Ann Goldman, Chapter 13 Trustee ("Trustee"), and nine unsecured creditors in the Chapter 13 case. The complaint alleges that the Trustee, acting pursuant to her duties, improperly disbursed $19,150.37 pro rata to the named unsecured creditors contrary to the terms of the confirmed Chapter 13 plan. The complaint further states that payment of $19,150.37 should have been made to Dewitt Bank & Trust Company, which holds a claim secured by the Debtors' personal residence. The complaint alleges that general unsecured creditors should not have received disbursements until administrative, secured, priority, child support, and special non-priority unsecured creditors were paid in full. In their complaint, the Debtors prayed for turnover of said funds from the unsecured creditors and in the alternative prayed for judgment against the Trustee in a sum sufficient to compensate the Debtors for damages proximately caused by the Trustee's action, together with costs and attorney's fees. The Trustee filed a timely answer admitting that she had distributed $20,056.03 to unsecured creditors pursuant to the terms of the Debtors' confirmed plan "which proposed that all disposable income received by the Debtors within the first 36 months of the plan would be paid for the benefit of unsecured creditors." (Answer to Complaint for Turnover at 2.) She alleged the distribution was proper and prayed that the complaint be dismissed. Trial on the merits was held in Pine Bluff, Arkansas, on May 10, 2006, and the matter was taken under advisement. On June 1, 2006, the parties filed a notice of settlement, which was scheduled for a hearing to take place on July 5, 2006. At that hearing, the court indicated that it intended to dismiss the complaint filed by the Debtors and also disapprove the settlement reached by the parties. The following shall constitute the Court's findings of fact and conclusions of law in regard to the merits of the Debtors' complaint and the proposed settlement. This Court has jurisdiction over the matter as a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(E) and may enter a final judgment in this case. I. BACKGROUND The Debtors filed a voluntary petition for relief under the provisions of Chapter 13 of the United States Bankruptcy Code on March 3, 2003. After two modifications, the second modified plan was confirmed on July 30, 2003. The second modified plan, which incorporated provisions of the first and second proposed plans, provided that the plan length would remain 58 months in duration. The Debtors reduced their plan payment from $939.00 to $775.00 a month. Language in the plan stated that "Debtors 696 shall submit all projected disposable income for the benefit of unsecured creditors during the first 36 months of the plan in accord with 11 U.S.C. § 1325." (Modification of Chapter 13 Plan, July 1, 2003.) The only secured claim to be paid in full over the life of the plan arose from a debt to Dewitt Bank & Trust, with a value of $32,500.00 to be paid at the rate of 6% interest. A provision of the original plan that was incorporated into the second modification stated that nonpriority unsecured creditors would receive a pro-rata dividend from funds remaining after payment of administrative, secured, priority, child support and special nonpriority unsecured claims. The Debtors' schedules list $40,456.57 in general unsecured debt and no priority debts. Schedules I and J state the Debtors' monthly income at $2048.70 and monthly expenses at $1110.00, which leaves income of $939.00 available to be paid into the plan. Cameron v. Cameron (In re Cameron), 243 B.R. 117, 122 (M.D.Ala.1999)(difference between debtor's income and necessary expenses is disposable income)(citing Sparagna v. Metzger (In re Metzger), 232 B.R. 658, 664 (Bankr.E.D.Va.1999); Soforenko v. Soforenko (In re Soforenko), 203 B.R. 353, 864 (Bankr.D.Mass.1997); Smith v. Smith (In re Smith), 218 B.R. 254, 259 (Bankr. S.D.Ga.1997); Willey v. Willey (In re Willey), 198 B.R. 1007, 1014 (Bankr.S.D.Fla. 1996)). These schedules have never been amended even though the Debtors' plan payment is only $775.00 per month.[1] On March 29, 2005, the Debtors filed a motion to settle a tort claim that had been scheduled, but valued at "unknown." (Trustee's Ex. 1, Schedule B-Personal Property.) The settlement was approved by the Court, and the sum of $30,056.03 was paid to the Trustee, who was handling the case personally. Jeremy Bueker, an attorney for the Debtors, testified that he represented the Debtors in connection with the settlement of the tort suit. He identified Plaintiff's Exhibit 3, a series of e-mails between himself and the Trustee. The Trustee also testified that she had other communication with the Debtors' attorney by telephone. The substance of the emails and phone calls concerned how the proceeds of the tort suit were to be distributed. Bueker took the position that the unsecured creditors should not receive a distribution from the tort claim until the debt secured by the Debtor's home was paid in full. The Trustee interpreted the plan to require the proceeds to be distributed to unsecured creditors because the debt secured by the Debtors' home would be paid in full during the life of the plan by the monthly payment of $775.00 from the Debtors' future income. The exchange of e-mails ended with the Trustee stating, "I will pay it out but add whatever the amount is to the base so the unsecured creditors are being paid with monthly payments." (Pl.'s Ex. 3.) Whatever this statement means, the Debtors' attorney did nothing by way of modifying the plan to accommodate the trustee's request. Bueker understood that the Trustee agreed to distribute the proceeds to pay the claim secured by the Debtors' home and that the Debtors would continue in the case for the full 58 months, and, therefore, unsecured creditors would receive much of the $775.00 per month payment over the life of the plan. (Tr. at 21.) The motion 697 to settle claim that was agreed on, however, simply stated that the funds would be distributed to the Trustee to be disbursed pursuant to the confirmed plan, except that the Debtors would be allowed to request a refund. (Pl.'s Ex. 2.). Contrary to the understanding between the Trustee and Bueker, the Trustee's office distributed approximately. $20,000.00 to unsecured creditors shortly after receipt of the tort settlement.[2] The Trustee testified she forgot to inform her staff of her agreement with Bueker, and the money was paid pursuant to established procedures. As a result, the Debtors filed this adversary proceeding seeking to recover the funds from the Trustee and the creditors. II. THE ARGUMENTS In their complaint, the Debtors allege that they should have judgment against the Trustee and each of the unsecured creditors on a pro rata basis in the sum of $19,150.37 because the distribution was made outside the terms of the confirmed plan and in breach of an agreement with the Trustee. No one disputes that the tort settlement was paid during the first 36 months of the plan. Further, the proceeds constitute disposable income. Waters v. McRoberts, 167 B.R. 146, 147 (S.D.Ill.1994)(stating that since debtors' personal injury recovery was not needed for expenses, full amount was to be paid into the chapter 13 plan as disposable income). See also In re Pendleton, 225 B.R. 425, 427-28 (Bankr.E.D.Ark.1998) (holding that personal injury proceeds were disposable income, even if claimed exempt). If the money is distributed improperly and not pursuant to the plan, courts have held the trustee liable. Nash v. Kester (In re Nash), 765 F.2d 1410, 1415 (9th Cir.1985) (holding trustee liable for improper distribution in Chapter 13 case); In re Estrada, 322 B.R. 149, 151 (Bankr.E.D.Cal.2005) (stating that a trustee who has erroneously distributed dividend must recover the overpayment and if he cannot, he may have to personally make good on the misdirected payment). The Debtors argue that the terms of the confirmed plan required the Trustee to pay the entire balance of the proceeds of the tort suit to defray the claim of Dewitt Bank & Trust that is secured by a lien in real property used as the Debtors' primary residence. The plan did not specify how much per month was proposed to be paid to this creditor, but only provided that the amount of the claim was $32,500.00 and that the claim was to be paid in full over the 58-month life of the plan, including interest at the rate of 6% per annum. The second modified plan listed no other secured creditors and proposed to pay $775.00 per month to the Trustee to pay the one secured claim and the administrative claims in full. The plan proposed for payment to the unsecured creditors to be pro rata. The dispute in this case centers around two contradictory provisions in the confirmed plan. One provision provides, "Debtors shall submit all projected disposable income for the benefit of unsecured creditors during the first 36 months of the plan in accord with 11 U.S.C. § 1325." (Pl.'s Ex. 1, Modification of Chapter 13 Plan.) A second provision provides, "nonpriority unsecured creditors shall receive a 698 pro-rata dividend from funds remaining after payment of administrative, secured, priority, child support, and specific nonpriority claims." (Pl.'s Ex. 1, Chapter 13 Narrative Statement of Plan.) To compound the issues raised in the case, the Debtors filed a third modified plan on March 16, 2006, while this adversary proceeding was pending and after the case had been pending for 36 months. The third modified plan proposed no further distribution to unsecured creditors in the case. Neither the Trustee nor any creditor objected to confirmation; therefore, the modified plan was confirmed on April 11, 2006.[3] The Debtors argue that the two contradictory plan provisions are actually consistent with each other. The Debtors' argument is difficult to follow. The following is an example: The two paragraphs in question are not in contradiction. They must, however, be read and interpreted together which results in the understanding indicated in the paragraph above. The understanding is that the benefit to the unsecured creditors is all projected disposable income is committed to the plan for the first 36 months of the plan so that after payment of the superior claims, i.e. Administrative, Secured, Priority, Child Support and Special Non-Priority Unsecured, they (nonpriority unsecured) will share in the remaining funds on a pro rata basis. The purpose of the first paragraph "Debtor shall submit all projected disposable income for the benefit of unsecured creditors during the first 36 months of the plan" is to insure that the debtor is in a plan for at least 36 months. Otherwise, plans would' be devised to only pay the superior claims and indicate a zero percent 0% distribution to non-priority unsecured claims, and upon satisfaction of claims, other than non-priority unsecureds, the plan would conclude and the debtor receive a discharge before conclusion of the 36th month, and non-priority secureds receive nothing ($00.00). (Pl.'s Post-Hearing Brief, May 24, 2006.) Although the Trustee did not file a brief in the adversary proceeding, she attempted to explain her interpretation of the plan at the hearing. She stated that the regular plan payment of $775.00 was distributed by her office more or less in conformity with the paragraph dealing with the priority of payments, i.e., the administrative claims paid in full first, the secured claims paid in full, and then any remaining monies would be paid to unsecured creditors toward the end of the case. However, when the personal injury money became available she interpreted the plan to require this money to go to unsecured creditors. She stated, A. Yes, we interpret the `debtors' plan and we request that the disposable income language be put in there because at the time that this case was filed, and the law, was that all disposable income would be paid in for the benefit of unsecured creditors. 699 When we get personal injury money, the only way to make sure that that money does go to the benefit of the unsecured creditors is to pay that out to unsecured creditors. However, we always make sure that the plan is current at the time so that none of the secured all of the secured creditors are current in their payments and the plan is actually current, if and when we do that. Q. The proceeds that were paid to unsecured creditors, do you know the percentage to the unsecureds that they received? A. 45 percent I believe it's 45 percent. (Tr. at 41-42.) When asked if she had actually intended to pay secured claims with the settlement proceeds, pursuant to the agreement with Bueker, she stated, A. Well, Mr. Bueker and I had conversations other than the email. We actually did have a telephone conversation, and that `conversation entailed, "Why does it matter if the debtor wants to continue to pay the 775 a month anyway? The same money is going to go to unsecured creditors, so why does it matter?" When I get a request like this, it would be a courteous request that I would grant a request like this because it's not being done in the ordinary course of my business, which means it has to become now a manual process for my staff. So it, would have been out of courtesy. But with my conversation with Mr. Bucker the result would have been the same because had the unsecured creditors not gotten the benefit of the 20,000 when I paid it out, they would have gotten they would have gotten the 775 a month, and they would have gotten-they would have gotten that money anyway. So if the debtor didn't intend on changing the plan terms, or doing anything else during the course of the plan, then the net result would have been the same, which would have been the only reason why I would have told Mr. Bueker I could do that. But I did refuse to sign off on the original order because I needed to be able to disburse the money as the plan as the plan states and make sure that the unsecured creditors do get that disposable income. (Tr. at 43-44.) When asked how she reconciled the two contradictory sentences in the plan, the Trustee testified, Q. In order to reconcile the two paragraphs, "Debtor shall submit all projected disposable income for the benefit of unsecureds," and "Nonpriority unsecureds shall receive a pro rata dividend after payment of administrative, secured, priority, child support, and special nonpriority unsecured." The way to reconcile that is the first paragraph talks about projected disposable income? A. Under the old law additional disposable income is the additional disposable income. The projected disposable income is the plan payment. And that is where it comes in that is what, under what you're saying, would come in and pay the secured, the priority, and all those debts. The additional disposable income is the personal injury settlement and that comes in for the benefit of the unsecured creditors. Q. But there is no plan language that talks about this other special disposable income, is there? A. The disposable income, we interpret that paragraph to mean that all disposable income that has come into the plan, 700 and then when you notice up here your settlement, we request that the order read that it come into the plan, period, and it gets disbursed. So, yeah, it gets disbursed to unsecured creditors. What debtors' attorneys and sometimes debtors don't understand is, is the Trustee often pays unsecured creditors with what you are calling projected disposable income, which is the plan payment, all the time in connection with the while secured debt is being paid, because what happens is, is that as the if you have a monthly payment secured creditor, for instance, then if everybody is current, you always drop down to the next level. So you can look at some of your cases and you will find that unsecured creditors are being paid at the same time as the secured creditors. (Tr. at 48-49.) Upon examination by the Court as to her method of disbursement to various levels of creditors, the Trustee further explained, THE WITNESS: [T]he payments are always disbursed in Chapter 13 pursuant to the terms of the confirmed plan. THE COURT: All right. And in this case can you reconcile in the original plan the provision that says, "Nonpriority unsecureds shall receive pro rata dividend remaining after payment of administrative, secured, priority, child support, and special nonpriority unsecured claims," with the provisions that say in the modification that, "Debtor shall submit all projected disposable income for the benefit of unsecured creditors during the first 36 months of the plan?" THE WITNESS: The way we interpret that is that the regular plan payment pays the priority down. And that the projected disposable income is what in the old Code was the disposable income that would be paid in for the benefit of unsecured creditors. So I don't think that there is necessarily a contradiction in terms because this is excess money. So the way that the normal disbursement process goes, in all cases, is that money will always filter down to the next level when the level above it is current, but that's when the regular monthly payments are coming in, not additional personal injury money and things like that. We handle those differently. (Tr. at 51-52.) The Trustee admitted that she agreed with Bueker to pay the proceeds of the tort settlement to the bank as a courtesy even though she interpreted the plan as requiring her to pay the settlement proceeds to unsecured creditors. She said she agreed to do that, hoping the Debtors would not file a modification after 36 months to discontinue any payments to unsecured creditors. Of course, this is exactly what the Debtors did. III. DISCUSSION The Bankruptcy Code provides in relevant part that a plan will be confirmed if (4) the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date; 11 U.S.C. § 1325(a)(4) (2000). If the Trustee had paid the proceeds to the Debtors' secured creditor and the Debtors had modified their plan after 36 months to cease payments to unsecured creditors (which the Debtors did), then the 701 distribution to the secured creditor would not comply with section 1325(a)(4). The plan for distribution would not comply because the unsecured creditors would not have received any of the proceeds of the tort claim but would have received those proceeds under Chapter 7. To distribute the funds as the Debtors propose, the Trustee would also have had to ignore the paragraph in the plan that provided that the disposable income received, during the first 36 months of the plan was for the benefit of unsecured creditors. Therefore, the Court concludes that paying the tort proceeds to the unsecured creditors is more consistent with the Code and more reasonable, considering the poorly drafted plan, than paying the entire sum to the secured creditor. The plan drafted by the Debtors and approved by the Trustee contains inherently contradictory provisions for the payment to creditors. The Debtors' argument in support of their interpretation of the plan is as incoherent as the Trustee's explanation in her testimony. The Trustee in making distribution under the plan has to choose one or the other of the contradictory paragraphs to make payment. The Trustee should insist that all Chapter 13 plans, including this one, be clear and specific in their treatment of creditors' claims, and the Trustee should object to any plan that is incomprehensible. Section 1322(b)(4) of the Bankruptcy Code allows a plan to provide for concurrent payments to secured and unsecured (creditors; however, most debtors prefer to pay secured creditors first in case of dismissal, conversion or modification. 8 Collier on Bankruptcy ¶ 1322.08 (Alan N. Resnick & Henry J. Sommer et al., eds, 15th ed. rev.1993). In this case, because of the large influx of extra disposable income during the first 36 months of the plan, the Trustee or Debtors should have filed a modification pursuant to 11 U.S.C. § 1329(a) to include the tort award in the plan distribution by increasing payments during the first 36 months of the plan. See, e.g., 3 Keith M. Lundin, Chapter 13 Bankruptcy § 266.1 (3d ed. 2000 & Supp.2004)(observing courts have "aggressively allowed" trustees and unsecured claim holders to modify plans to increase payments when debtors have realized new income). Instead of filing a modified plan to deal with the changed circumstances pursuant to section 1329, the Debtors' counsel and the Trustee arrived at an agreement that was not disclosed to either the Court or other parties in interest who might have objected. This secret agreement for distribution under the existing plan was admittedly contrary to what the Trustee thought was a proper distribution. In the Court's opinion, if the Trustee had performed as she agreed, she would have been guilty of malfeasance. She said she did this as a favor to Debtors' counsel. The fact that the agreement was undisclosed does not reflect favorably on either the Trustee or Bueker. The Debtors' final argument is that an injustice has occurred because the Chapter 13 Trustee breached her agreement with counsel for the Debtors to pay the bank's secured claim. The Trustee does not dispute this and admits that she was at fault for not notifying her staff of the agreement. The Debtors are, however, not entitled to recourse against the Trustee because the Debtors were acting in pari delicto with the Trustee to make distribution contrary to her interpretation of the plan. Furthermore the Debtors themselves drafted a plan with conflicting provisions relating to distribution. Therefore, the Debtors are not entitled to relief in this *702 Court of equity under the doctrine of unclean hands. For these reasons, the plaintiffs' complaint for turnover as to all defendants is dismissed. IT IS SO ORDERED. NOTES [1] The record does not explain why the Debtors are not paying all of their disposable income into the plan as proposed. [2] Goldman testified she distributed $20,000.00 to unsecured creditors representing a dividend of 45 percent. (Tr. 42.) [3] The Trustee admitted she should have objected to the third modification. When questioned by the Court, she stated, The Court: And you were in a position to object to his modification if he didn't do that, I assume? The Witness: I was. Those modifications come through routinely in my office with 9,000 cases, and obviously, we didn't object to this modification in March when it came in paying zero percent. The Court: You would have if you had noticed it? The Witness: Yeah, we should have. (Tr. 56)	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2017141/	174 N.W.2d 372 (1970) David BANGS, Appellant, v. Hillary G. KEIFER, Appellee. No. 53854. Supreme Court of Iowa. February 10, 1970. Rehearing Denied April 6, 1970. 373 Alfred A. Beardmore and T. A. Beardmore, Charles City, for appellant. Larson & Carr, Charles City, for appellee. LARSON, Justice. The plaintiff David Bangs brought this action at law for damages as a result of an accident at a street intersection in Charles City, Iowa, on March 11, 1967. When defendant's automobile, driven with his consent by his son, failed to slow or stop before entering this stop intersection, it struck the left rear of plaintiff's automobile. Defendant pleaded legal excuse, claiming that the accelerator on his automobile unexpectedly stuck as it approached the intersection and that reasonable efforts to remedy the situation failed. Although plaintiff objected to any instruction on legal excuse, and particularly the one proposed by the court, Instruction No. 13 was given and the jury returned a verdict for defendant. Plaintiff appealed. We affirm. Errors relied on for reversal are: (1) The court erred in submitting an instruction on legal excuse when as a matter of law the defendant's evidence showed that it was reasonably practicable for the defendant's driver to avoid violating the statutes. (2) The court erred in giving Instruction No. 13, the legal excuse instruction, in that it failed to instruct the jury that a legal excuse must be something that made it reasonably impracticable for the defendant's driver to comply with the statute or statutes, and merely instructed it that if the defendant's driver acted as a reasonably prudent man under the circumstances he would not be negligent. I. There is no substantial dispute in the evidence. Defendant's driver admitted that he did not stop at the stop sign before entering the intersection, that he entered it at an unlawful speed of approximately 40 miles per hour, and that his car struck plaintiff's vehicle while in the intersection. His testimony, corroborated by two of his passengers, was that as he approached the intersection when about half a block or 138½ feet therefrom, he discovered that his accelerator was stuck. It also appeared when he entered that block his speed was about 15 miles per hour. At first he accelerated his speed, but as he approached the intersection and let up on the accelerator, there was no response. At this time his speed had increased to about 30 miles per hour and a light application of his brakes did not help. Concluding that his accelerator was stuck, he attempted to free it by kicking and jiggling it, but to no avail. He then discovered plaintiff's vehicle, applied his brakes hard, sliding all four of his wheels, but this did not slow his car sufficiently to avoid the collision. On cross-examination defendant's driver admitted if he had thrown the car out of gear when he first discovered the stuck accelerator, or if he had at that time turned off the ignition, the brakes would have stopped his car before it entered the intersection. His passengers were not quite so sure. At any rate he did not attempt those 374 remedies, asserting he did not have the additional time to do so. Appellant argues that, because of the driver's admission of several statutory violations, plus his statement that there was something he could have done to avoid the collision besides trying to free the accelerator, he was not entitled to a legal excuse instruction. Appellee argues that from this record it appears defendant's driver had less than two seconds to act in the best and most effective way to avoid violating these statutory mandates, that although perhaps hindsight is better than foresight, it is clear the driver was faced with an emergency not of his own making, and that this is a classic example of the reasonable and proper application to our heretofore-recognized and adhered-to legal excuse doctrine. II. Legal excuse, we have said, is a doctrine by which one seeks to avoid the consequences of one's conduct by showing justification for acts which would otherwise be considered negligent. Gibbs v. Wilmeth, Iowa, 157 N.W.2d 93, 96. This doctrine has been considered and applied by our court many times. As a result of our leading case of Kisling v. Thierman, 214 Iowa 911, 916, 243 N.W. 552, 554, legal excuse has been defined to mean (1) anything that would make it impossible to comply with the statute or ordinance; (2) anything over which the driver has no control which places his car in a position contrary to the provisions of the statute or ordinance; (3) where the driver of the car is confronted by an emergency not of his own making and, by reason thereof, he fails to obey the statute; (4) where a statute specifically provides an excuse or exception. Baker v. Wolfe, Iowa, 164 N.W.2d 835, 838; Pinckney v. Watkinson, 254 Iowa 144, 116 N.W.2d 258; Oakes v. Peter Pan Bakers, Inc., 258 Iowa 447, 138 N.W.2d 93, 10 A.L.R.3d 247; Peters v. Rieck, 257 Iowa 12, 131 N.W.2d 529; McCoy v. Miller, 257 Iowa 1151, 136 N.W.2d 332; Gibbs v. Wilmeth, supra ; Yost v. Miner, Iowa, 163 N.W.2d 557; Clubb v. Osborn, 256 Iowa 1154, 130 N.W.2d 648; Winter v. Moore, 255 Iowa 1, 121 N.W.2d 82; McKeever v. Batcheler, 219 Iowa 93, 257 N.W. 567; 7 Am.Jur.2d, Automobiles and Highway Traffic, § 359, pp. 905, 906; Iowa State Bar Association's Uniform Jury Instruction No. 5.7, Legal Excuse. A violation of statutory rules of the road or ordinances, of course, constitutes negligence per se, and to excuse such a violation the emergency must not have been caused or contributed to by the one claiming legal excuse. Gibbs v. Wilmeth, supra, and citations ; Florke v. Peterson, 245 Iowa 1031, 1034, 65 N.W.2d 372, 373; Winter v. Moore, supra. III. An emergency has been defined as (1) an unforeseen combination of circumstances which calls for immediate action; (2) a perplexing contingency or complication of circumstances; (3) a sudden or unexpected occasion for action, exigency, pressing necessity. Oakes v. Peter Pan Bakers, Inc., supra, 258 Iowa 447, 458, 138 N.W.2d 93, 100, 10 A.L.R.3d 247; Young v. Hendricks, 226 Iowa 211, 215, 283 N.W. 895, 898; Harris v. Clark, 251 Iowa 807, 810, 103 N.W.2d 215, 217; Yost v. Miner, supra ; Band v. Reinke, 227 Iowa 458, 288 N.W. 629; Jakeway v. Allen, 227 Iowa 1182, 290 N.W. 507; Noland v. Kyar, 228 Iowa 1006, 292 N.W. 810; Fagen Elevator v. Pfiester, 244 Iowa 633, 56 N.W.2d 577; Iowa Uniform Jury Instruction No. 5.4, Sudden Emergency. The extent and nature of an emergency is usually a fact question and, if there is substantial evidence that an emergency had developed, the jury should be instructed thereon. Yost v. Miner, supra, Iowa, 163 N.W.2d 557, 562. IV. Appellant's first contention poses the question of whether, in the case of a sudden emergency resulting in a statutory violation, the driver of a motor vehicle must be found negligent as a matter of law unless he can show by a preponderance 375 of the evidence that he comes within all three of the categories recognized in Kisling v. Thierman, supra, 214 Iowa 911, 243 N.W. 552, or under the exception in the fourth category. We have not so construed this law. The claimant may choose his category. Florke v. Peterson, supra; 245 Iowa 1031, 65 N.W.2d 372. Appellant's principal contention, however, is that, in order to excuse a violation of a statutory rule of the road constituting negligence per se which resulted from an emergency not of his own making, one must establish that he could do nothing "practicable" that would have avoided the violation and that the action of a reasonably prudent man in such an emergency would not be a proper issue for jury determination. We cannot agree. We have never adopted the "practicable" approach to this problem, but have always adhered to the reasonably-prudent-man test to determine whether one acted properly in an emergency not created or contributed to by him. We have always permitted a jury to find compliance with the statute or statutes involved was impossible if he acted as a reasonably prudent man in his attempt to avoid the violation. Since to adopt the "practicable" approach here would compel a finding of negligence as a matter of law, we decline to do so. We have consistently held, when one has not caused or contributed to the emergency facing him, he is not negligent for statutory violations if the jury finds he acted as a reasonably prudent person placed in that circumstance. In any event, in the matter before us it is not seriously claimed that the emergency facing defendant's driver was caused or contributed to by him, nor was it something over which the driver had control which placed his car in a position contrary to the provisions of a statute or ordinance. It is clear that the statutes involved did not themselves specifically provide an excuse or exception so that this claim of legal excuse must be based upon the first category, which would be anything that would make it impossible to comply with the statute or ordinance. The question of whether it was possible or impossible is generally one for the jury under proper instructions from the court. We can think of no better instructional guideline than that the acts must be those of a reasonably prudent man faced with that emergency, and hold, if we are to recognize and apply a legal excuse doctrine, it is the just and fair method to determine that fact. Appellant relies heavily upon the case of Bush v. Harvey Transfer Co., 146 Ohio St. 657, 664, 665, 67 N.E.2d 851, 855, 856, which appears to reject the so-called common-law rule of reasonable care under the circumstances in cases involving legal excuse for violation of safety statutes. It is true, the Ohio Supreme Court said therein: "Since the failure to comply with * * a safety statute constitutes negligence per se, a party guilty * * * cannot excuse himself * * * by showing that `he did or attempted to do what any reasonably prudent person would have done under * * * similar circumstances.' A legal excuse * * * must be something that would make it impossible to comply with the statute * * ." Standing alone, that showing may not be sufficient, but when coupled with a showing that the emergency was not due to claimant's fault, we believe legal excuse may be established. We considered the Ohio position in Florke v. Peterson, supra, and adopted it only so far as it related to cases where the person claiming the legal excuse did in fact cause the emergency, and then denied him the right to show that his acts in creating and seeking to avoid the violation were those of a reasonably prudent person. That is not the case at hand, and we cannot agree that it is the burden of a driver innocent of any fault in creating the emergency to also show he did everything practicable to avoid the statutory violation under that circumstance. In Florke v. Peterson, supra, we said at page 1036 of 245 Iowa, page 375 of 65 N.W.2d: "Plaintiff must base his 376 claim of `legal excuse' upon some one of the four categories already enumerated * * ." (Emphasis supplied.) In that case the court found plaintiff selected the first category, that the conditions were such as to make compliance with the statute impossible. In denying the application of legal excuse there it was held that, even viewing the evidence in a light most favorable to plaintiff, the so-called emergency was partially caused by plaintiff's failure to observe the T-intersection ahead and that in such instance the common-law rule of reasonable care or the care which a reasonably prudent man would exercise under those circumstances was not applicable. A careful review of the cases cited in Florke v. Peterson, supra, indicate those pronouncements relate to an attempted excuse of one not free from fault in creating the emergency. In other words, the claimant attempted to excuse his act in creating the emergency by showing that he acted as a reasonably prudent man in that situation. It seems to us there is quite a difference between that situation and this case where the emergency is created without fault of the operator. We have said that one whose own negligence has caused or contributed to a situation which makes it impossible for him to obey the law may not rely upon such conduct as a basis for invoking the legal excuse doctrine. Whether one has established a legal excuse is usually, but not invariably, a jury question. Gibbs v. Wilmeth, supra, Iowa, 157 N.W.2d 93, 96. We held, under the circumstances there presented, it was properly submitted. V. In its Instruction No. 13 the court here told the jury: "The defendant claims that if it is found that Dennis Keifer violated a statute or statutes as set out in plaintiff's specifications of negligence 2, 3, and 4 in Instruction No. 1 hereof and as explained to you in Instructions 10, 11, and 12, that Dennis Keifer had a legal excuse for so doing and was therefore not negligent. "You are instructed that the burden of proof is upon the defendant to establish the defense of legal excuse by the greater weight or preponderance of the evidence. "By `legal excuse' is meant that one who violates a statutory rule of the road may relieve himself from liability for damages arising from such violation by showing that he had a legal excuse for such violation. "One such legal excuse is when the driver is confronted with an emergency not of his own making and by reason thereof fails to obey the statute or statutes. "When one is confronted with a sudden emergency, not brought about by his own fault, and because thereof is required to act upon the impulse of the moment without sufficient time to determine with certainty the best course to pursue, he is not held to the same accuracy of judgment as would be required of him if he had time for deliberation. Under such circumstances he is required to act only as an ordinarily, careful and prudent person would act when suddenly placed in a similar position, and if he so acts he is not liable for injury or damage resulting from his conduct. "As applied to this case, if you find that Dennis Keifer in the operation of his motor vehicle at said time and place violated a statute or statutes, and that because the accelerator stuck on the car he was driving so that he was confronted with a sudden emergency and he could do nothing to prevent violating the statute or statutes, then a legal excuse for violating such statute or statutes has been established and Dennis Keifer would not be negligent for violating the particular statute or statutes involved. "If, however, you find from the evidence that Dennis Keifer after learning that the accelerator had stuck failed to act as a reasonable and prudent person under the circumstances, then the sticking of the accelerator would not be a legal excuse, and if you find he did violate a statute or statutes, such violation would be negligence." 377 The Iowa Uniform Jury Instruction on Sudden Emergency, No. 5.4, states: "When one is confronted with a sudden emergency, not brought about by his own fault, and because thereof is required to act upon the impulse of the moment without sufficient time to determine with certainty the best course to pursue, he is not held to the same accuracy of judgment as would be required of him if he had time for deliberation. Under such circumstances he is required to act only as an ordinarily careful and prudent person would act when suddenly placed in a similar position, and if he so acts he is not liable for injury or damage resulting from his conduct." The Iowa Uniform Jury Instruction on Legal Excuse, No. 5.7, states: "The defendant claims that if it is found that he violated a statute or ordinance in the operation of his motor vehicle, that he had a legal excuse for doing so and was, therefore, not negligent. You are instructed that the burden of proof is upon the defendant to establish a legal excuse by a preponderance of the evidence. "By the term `legal excuse' is meant: "1. Anything that would make it impossible to comply with the statute or ordinance. "2. Anything over which the driver has no control which places his car in a position contrary to the provisions of the statute or ordinance. "3. When the driver is confronted by an emergency not of his own making, and by reason thereof he fails to obey the statute. "4. Where the statute specifically provides an excuse or exception. "If you find that the defendant has violated a statute or ordinance, as submitted to you in other instructions, and that he has established a legal excuse for doing so under any one of the four definitions given to you in this instruction, then you should find the defendant not negligent for violating the particular statute or ordinance involved." In the case at bar it is apparent the trial court combined Iowa Uniform Jury Instructions Nos. 5.4 and 5.7 in its Instruction No. 13 and fairly and sufficiently advised the jury as to the law in this jurisdiction. In an abundance of caution Instruction No. 13A told the jury that, if it found this driver was driving at a speed in excess of the statutory speed when the accelerator stuck, he could not excuse the violation. In such instance there would be contributing fault of the driver, but the jury apparently found such was not the case here. We are satisfied the trial court did not err in giving Instruction No. 13, that to be entitled to an instruction on legal excuse the claimant must show by a preponderance of the evidence that he comes under at least one of the four categories listed in Kisling v. Thierman, supra, 214 Iowa 911, 243 N.W. 552, that he did not cause or contribute to the emergency to avoid negligence for a statutory violation, and that after this emergency arose he acted as a reasonably prudent person to avoid the violation. We are also satisfied the "practicable" approach used in some jurisdictions is too severe and places too heavy a burden on one innocent of fault to do the best thing to avoid the violation under a penalty of being found negligent as a matter of law. Here, for instance, defendant's driver's opinion after the accident that he could have avoided the statutory violations by turning off the ignition or throwing the car out of gear should not be conclusive of his failure to do that which, to a reasonably prudent person, would seem best to avoid the statutory requirement. He should be held to no greater standard of care under that situation. VI. A brief review of the following cases indicates our past consideration of 378 these questions and this court's application of the legal excuse doctrine. In the recent case of Yost v. Miner, supra, Iowa, 163 N.W.2d 557, 562, 563, plaintiff collided with defendant on defendant's side of the road, but claimed legal excuse because just prior to the accident it was defendant who was allegedly traveling in the wrong lane. In holding plaintiff's requested instruction on legal excuse should have been given, we said: " * * if a sudden emergency did confront him, then his duty would have been to exercise only the care of an ordinarily careful and prudent person when suddenly confronted by a like emergency when placed in a similar position. * * * `the nature and extent of an emergency is usually a fact question and if the party urging the existence of "sudden emergency" sustains his contention by substantial evidence that such an emergency had developed * * , the jury should be instructed thereon. (Citations.)'" In Winter v. Moore, supra, 255 Iowa 1, 4, 121 N.W.2d 82, 83, we reiterated our view that for a sudden emergency to be an excuse for a motorist's violation of a statutory rule, it must not have been of his own making. Therein we found an instruction on sudden emergency was error where defendant turned into the left lane to pass a truck when her vision was obstructed by an automobile passing a second truck and she was unable to see an approaching car in time to avoid a collision. In Gibbs v. Wilmeth, supra, Iowa, 157 N.W.2d 93, 96, we found defective a jury instruction which did not adequately advise the jury of one of the essential elements to establish sudden emergency as legal excuse, i. e., absence of fault by the one who invokes it. Therein we stated: "It is, of course, well settled that one whose own negligence has caused or contributed to a situation which makes it impossible for him to obey the law may not rely upon such conduct as a basis for invoking the doctrine. (Citations.) Whether one has established a legal excuse is usually, but not invariably, a jury question. In considering this matter the evidence is to be viewed in the light most favorable to the one asserting the existence of legal excuse. (Citations.)" The case of Oakes v. Peter Pan Bakers, Inc., supra, 258 Iowa 447, 457, 458, 138 N.W.2d 93, 100, 10 A.L.R.3d 247, involved the collision of six motor vehicles in a snow storm. In upholding a verdict for defendants who had pleaded sudden emergency, we stated: "To constitute a legal excuse for violation of a statute, of course an emergency must not be of the driver's own making. (Citations.)" After stating the various definitions of an emergency, we said the question of whether one was without fault in bringing about an emergency generally is for the jury. In Peters v. Rieck, supra, 257 Iowa 12, 20, 131 N.W.2d 529, 533, plaintiff was stopped at a stop sign when struck from the rear by defendant's truck. Defendant stated he was about 15 to 20 feet from the rear of plaintiff's truck when his brakes suddenly failed. The emergency brake was working, but he did not have time to use it or do anything between the time of the failure of the brakes and the impact. We upheld a jury verdict for defendant and found that the following jury instruction sufficiently informed the jury on the matter of legal excuse: "If you find that the driver * * was faced with an emergency not of his own making and because thereof was required to act upon the impulse of the moment without sufficient time to determine with certainty the best course to pursue, he is not to be held to the same accuracy of judgment as would be required of him if he had had time for deliberation, and under such circumstances he was required to act only as an ordinarily careful and prudent person would act when suddenly placed in a similar position, and if you find that he did so act, then you may find that the defense of sudden emergency is available to him as applied to any failure on his part to take measures to avoid the collision 379 after he found that his brakes had failed to work." A similar instruction was approved in Pinckney v. Watkinson, supra, 254 Iowa 144, 150, 116 N.W.2d 258, 261, and we held it was a proper matter of determination for the jury. In that case defendant came over a knoll in the road and had only three seconds to avoid plaintiff's car, which was stopped partially on the highway, with a car approaching in the other lane. The jury there was told: " * * Accordingly, if you find that the defendant * * * was confronted by an emergency not of his own creation, and if he exercised such care as an ordinarily reasonable, prudent and cautious man would exercise when suddenly confronted by a like emergency, and placed in similar circumstances, he is not guilty of negligence because of the result, even though another course of conduct might have been more judicious or more safe or might have avoided the accident." In Wachter v. McCuen, 250 Iowa 820, 96 N.W.2d 597, plaintiff found his passage to the left was blocked by defendant's truck moving down the road in the same direction, and he commenced to pass on the right as defendant pulled back over. We found therein that plaintiff's failure to obey the ordinance was negligence per se and he could not claim legal excuse for his violation where it appears, if he had slowed his speed, he would have found the truck returning to the right side, and the emergency which arose was at least in part created by the motorist. In McKeever v. Batcheler, supra, 219 Iowa 93, 95-96, 257 N.W. 567, 568, in dealing with the term "sudden emergency" under a revealed circumstance, we quoted with approval from 45 C.J. 710, § 92, saying: "* * * `where one is confronted with a sudden emergency, without sufficient time to determine with certainty the best course to pursue, he is not held to the same accuracy of judgment as would be required of him if he had time for deliberation. * * * Accordingly, if he exercises such care as an ordinarily prudent man would exercise when confronted by a like emergency, he is not liable for an injury which has resulted from his conduct, even though another course of conduct would have been more judicious or safer or might even have avoided the injury, * * *.'" VII. From the foregoing it appears a reversal of the judgment in this case would require a departure from our past pronouncements regarding the application of the "legal excuse" doctrine. We decline to do so and affirm the judgment rendered herein. Affirmed. MOORE, C. J., and SNELL, STUART, LeGRAND and REES, JJ., concur. MASON, J., takes no part. RAWLINGS and BECKER, JJ., dissent.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2522286/	52 F. Supp. 2d 231 (1999) Loretta ROLLAND, et al., Plaintiffs, v. Argeo Paul CELLUCCI, et al., Defendants. No. Civ.A. 98-30208-KPN. United States District Court, D. Massachusetts. June 4, 1999. 232 233 Richard D. Belin, Nima R. Eshghi, Foley, Hoag & Eliot, Boston, MA, Steven J. Schwartz, Center for Public Representation, Northampton, MA, Cathy E. Costanzo, Center for Public Representation, Northampton, MA, Stacie B. Siebrecht, Matthew Engel, Disability Law Center, Boston, MA, Frank J. Laski, Mental Health Legal Advisors Committee, Boston, MA, Christine M. Griffin, Disability Law Center, Boston, MA, for plaintiffs. Judith S. Yogman, Attorney General's Office, Government Bureau, Boston, MA, H. Gregory Williams, Attorney General's Office, Springfield, MA, Rosemary S. Gale, Assistant Attorney General, Boston, MA, for defendants. MEMORANDUM REGARDING DEFENDANTS' MOTION TO DISMISS (Docket No. 33) and DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' AMENDED COMPLAINT (Docket No. 55) NEIMAN, United States Magistrate Judge. This class action suit involves seven representative plaintiffs and two organizational plaintiffs, ARC Massachusetts ("ARC") and Stavros Center for Independent Living ("Stavros") (collectively "Plaintiffs"). In their complaint, as amended, Plaintiffs claim a violation of the integration mandate of the Americans with Disabilities Act (Count I), disability discrimination in violation of the Americans with Disabilities Act (Count II), violations of various Medicaid provisions including comparability, reasonable promptness, freedom of choice, services to developmentally disabled, services to nursing home residents (Count III through VII, respectively), and a violation of the Nursing Home Reform Amendments (Count VIII). Plaintiffs seek injunctive and declaratory relief from the Governor of Massachusetts ("Governor"), the Secretary of the Executive Office of Administration and Finance ("A & F"), the Secretary of the Executive Office of Health and Human Services ("EOHHS"), the Commissioner of the Division of Medical Assistance ("DMA"), the Commissioner of the Department of Mental Retardation ("DMR"), the Commissioner of the Massachusetts Rehabilitation Commission ("MRC"), the Commissioner of the Department of Public Health ("DPH"), and the Director of Region I for the Department of Mental Retardation ("Reg I"). Defendants now seek to dismiss the entirety of the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). In essence, Defendants contend that 42 U.S.C. § 1983 provides no redress for violations of the various statutory provisions under which Plaintiffs seek vindication. For the reasons set forth below, Defendants' motion will be denied. I. STANDARD OF REVIEW A motion to dismiss under Rule 12(b)(6) is designed to test whether the complaint properly states a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6). When assessing a Rule 12(b)(6) motion, a court does not weigh the evidence which might be presented at trial, but merely determines whether the complaint itself is legally sufficient. Kusek v. Family Circle, 894 F. Supp. 522, 527 (D.Mass.1995); Duncan v. Santaniello, 900 F. Supp. 547, 553 (D.Mass.1995). In carrying out this function, a court must accept "the factual averments contained in the complaint as true, indulging every reasonable inference helpful to the plaintiff's cause." Garita Hotel Ltd. Partnership v. Ponce Federal Bank, F.S.B., 958 F.2d 15, 17 (1st Cir.1992). See Pihl v. Massachusetts Dep't of Educ., 9 234 F.3d 184, 187 (1st Cir.1993). However, the court "need not credit bald assertions, periphrastic circumlocutions, unsubstantiated conclusions, or outright vituperation." Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 51 (1st Cir.1990). The appropriate inquiry is whether, based on the allegations of the complaint, Plaintiffs are entitled to offer evidence in support of their various causes of action. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974). II. DISCUSSION It is well-settled that section 1983 is an available remedy for claimed violations of federal statutes as well as violations of the Constitution, Maine v. Thiboutot, 448 U.S. 1, 100 S. Ct. 2502, 65 L. Ed. 2d 555 (1980), except "where Congress has foreclosed such enforcement of the statute in the enactment itself and where the statute did not create enforceable rights, privileges or immunities within the meaning of § 1983." Suter v. Artist M., 503 U.S. 347, 355, 112 S. Ct. 1360, 118 L. Ed. 2d 1 (1992) (quoting Wright v. City of Roanoke Redev. and Hous. Auth., 479 U.S. 418, 423, 107 S. Ct. 766, 93 L. Ed. 2d 781 (1987)). The threshold test of whether a statute creates such enforceable procedural and substantive rights within the meaning of section 1983 is "whether [it] was intend[ed] to benefit the putative plaintiff[s]." Visiting Nurse Ass'n of North Shore Inc. v. Bullen, 93 F.3d 997, 1002-03 (1st Cir.1996) (quoting Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 509, 110 S. Ct. 2510, 110 L. Ed. 2d 455 (1990)). "If so, the provision creates an enforceable right unless it reflects merely a `congressional preference' for a certain kind of conduct rather than a binding obligation on the governmental unit, or unless the interest the plaintiff asserts is `too vague and amorphous' such that it is `beyond the competence of the judiciary to enforce.'" Id. (internal citations omitted). Defendants concentrate much of their motion on two factors within this enunciated test. They first argue that the various statutes at issue contain precatory rather than mandatory pronouncements, making the rights contained within them merely aspirational and thus unenforceable by Plaintiffs as a matter of law. Second, Defendants maintain that the statutory provisions at issue are simply too vague and amorphous to be amenable to judicial enforcement. A. Substantive Issues Defendants' assertions with respect to the various statutory claims made by Plaintiffs will be addressed seriatim. 1. Defendants first seek to dismiss those claims grounded in the Nursing Home Reform Amendments ("NHRA"), 42 U.S.C. § 1396r, which, in Plaintiffs' estimation, require the provision of "specialized services" to the mentally retarded and developmentally disabled class members, whether residing in or out of a nursing home. The relevant statutory provision requires that specialized services be provided "[i]n the case of a resident who is determined ... not to require the level of services provided by a nursing facility, but to require specialized services for ... mental retardation." 42 U.S.C. § 1396r(e)(7)(C)(i)(IV) and (iii)(III). In essence, Defendants aver that a section 1983 claim is an inappropriate vehicle to vindicate Plaintiffs' claimed NHRA rights given that the term "specialized services" is so inherently vague and amorphous as to allude judicial enforceability. Moreover, Defendants assert, neither the NHRA, nor its enabling regulations impose an enforceable duty upon them to provide specialized services to individuals residing in nursing facilities as a matter of law. The parties fundamentally agree that the NHRA was enacted to quell overutilization of nursing home care for those who are not in need of institutionalization. To accomplish this goal, the NHRA devised a preadmission screening process ("PASARR") 235 to be administered by the appropriate state agency, in this case the DMR, pursuant to relevant state and federal statutes and supporting regulations. See 42 U.S.C. § 1396r(e)(7)(B)(iv); M.G.L. ch. 123B. The parties also agree that the NHRA mandates that a state provide specialized services to those individuals who are determined through PASARR not to need treatment in a residential nursing facility. Otherwise, the parties' respective interpretations of the NHRA diverge. Plaintiffs maintain that the PASARR provisions create an affirmative duty for Defendants to provide specialized services and active treatment for individuals regardless of their residence. In counterpoint, Defendants maintain that the NHRA requires the state to render specialized services only in the event an individual does not require nursing home care. It does not appear to the court that the statutory language precludes the provision of specialized services to nursing home residents. It is clear that, at a minimum, the PASARR review is employed to determine "whether the resident [of a nursing facility who is] mentally retarded or developmentally disabled requires specialized services for mental retardation." 42 U.S.C. § 1396r(e)(7)(B)(ii). In fact, the statute directs the Secretary of the Health and Human Services ("Secretary") to promulgate regulations to make these determinations. Defendants concede as much. Defendants also acknowledge that the regulations promulgated at the direction of the Secretary by the Health Care Financing Administration ("HCFA") contemplate that a PASARR evaluation may determine that an individual requires both nursing home level care and specialized services. 57 Fed.Reg. 56,477 (Nov. 30, 1992). See 42 C.F.R. § 483.130(n). Despite the plain language of the implementing regulations, Defendants argue that courts are generally reluctant to imply a right of action under section 1983 from a regulation, as opposed to a statutory provision. Moreover, Defendants contend, the regulations go beyond the statutory scope of authority and are not amenable to judicial review and enforcement. At bottom, Defendants dispute that an enforceable obligation to provide specialized services for nursing facility residents arises from the NHRA itself. While they admit that no court has so held, Defendants maintain that Plaintiffs' claims under the NHRA should be dismissed in the absence of any evidence that Congress specifically intended to create a judicially enforceable right to specialized services. At best, Defendants maintain, the regulations are merely precatory. Finally, Defendants argue that the term "specialized services" is too nebulous and ill-defined to be suited to any type of judicial enforcement. For the reasons which follow, Defendants' assertions fail at this juncture. As already stated, the statute makes clear that the PASARR review may be utilized to determine whether a resident of a nursing facility, who is mentally retarded or developmentally disabled, requires specialized services. It does not preclude the provision of those services within a nursing home setting. Thus, the Secretary's implementing regulations are well within the statute's scope. Moreover, there does not appear to be any legal authority for the notion that appropriately promulgated regulations cannot create enforceable federal rights. In particular, the court finds section 1983 to be an appropriate vehicle to vindicate NHRA-based rights and Plaintiffs have made a sufficient claim for relief thereunder. (Am.Compl.¶¶ 121, 193-195.) In addition, the court finds that relevant sections of the statute, together with the implementing regulations, are sufficient to define the contours of specialized services and, thus, Plaintiffs' claim in this regard. The regulations define specialized services in great detail and include all of the services necessary to provide active treatment, a term the court understands to be used interchangeably with the term specialized services. 42 C.F.R. § 483.120 and 236 483.440(a). At a minimum, it would seem that the regulations form the requisite standard of care. Interestingly enough, Defendants proffer that Massachusetts generally complies with these regulations. That proffer signals the court that Defendants have not found the term "specialized services" as completely ill-defined as their arguments might suggest. Concededly, the question of judicial enforcement of the NHRA is for another day. As Defendants assert, it may well be beyond the court's purview to craft a detailed remedial scheme to address the alleged lack of specialized services to nursing home residents. However, with the use of knowledgeable health professionals to determine necessary services, such endeavors have been undertaken in the past by other courts in this and other districts. See Youngberg v. Romeo, 457 U.S. 307, 322-23, 102 S. Ct. 2452, 73 L. Ed. 2d 28 (1982) (once a court determines that "reasonable" habilitation must be provided in a mental health setting, what amounts to "reasonable" habilitation is best determined by qualified professionals and not by the court); Ricci v. Okin, 537 F. Supp. 817, 826 (D.Mass.1982) (the court undertook the obligation to determine the level of staffing necessary to assure compliance with its decree by relying on the guidance of a federal department of Health and Human Services personnel professional); Brewster v. Dukakis, 520 F. Supp. 882, 886 (D.Mass.1981) (the powers and responsibilities of the court in this class action with 2,135 plaintiffs was to supervise implementation of the negotiated agreement of the parties derived from the work of professionals in the mental health field). See also Martin v. Voinovich, 840 F. Supp. 1175, 1202 (S.D.Ohio 1993). Accordingly, the court will deny Defendants' motion to dismiss the NHRA claims contained in Count VIII of Plaintiffs' amended complaint. 2. Plaintiffs also proceed under two portions of the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq., one calling for the integration of disabled individuals into the mainstream of American life, the other guarding against certain forms of discrimination. a. Generally speaking, the ADA was intended to remedy the problem of unequal treatment of disabled persons. The ADA's integration mandate states that, "... no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of services, programs, or activities of a public entity, or be subjected to discrimination by any such entity." 42 U.S.C. § 12132. In implementing the statute at the direction of Congress, the Attorney General promulgated a regulation which provides in pertinent part that "[a] public entity shall administer services programs and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d). Defendants first argue that Plaintiffs fail to state a claim under the ADA's integration mandate. Given the paucity of conflicting precedent and the fact that the Supreme Court has recently heard oral argument on and is now considering this discrete issue, Defendants' claim may be dealt with relatively quickly. See L.C. by Zimring v. Olmstead, 138 F.3d 893 (11th Cir.1998). In short, the court believes that Plaintiffs have sufficiently presented their integration claim to survive Defendants' motion to dismiss. The complaint alleges that Plaintiffs are "qualified individuals with disabilities" bringing them within the coverage of the ADA either directly or pursuant to section 1983. (See Am.Compl. ¶¶ 6, 15-21, 98, 112.) Other courts have so held, L.C. by Zimring, 138 F.3d at 897; Helen L. v. DiDario, 46 F.3d 325, 333-34 (3rd Cir. 1995), and this court agrees. 237 In the court's opinion, Plaintiffs have also sufficiently alleged judicially enforceable rights, namely, that they unnecessarily receive services in an institutional rather than an integrated setting and that Defendants have failed to provide community services even when such services are most appropriate to Plaintiffs needs. (Am. Compl. ¶¶ 1, 3, 6, 8, 60, 108.) The court finds it immaterial, at this juncture, that many Plaintiffs reside in private rather than public nursing facilities. Defendants apparently do not dispute that they still have obligations in accordance with the ADA. 28 C.F.R. § 35.130(b); Helen L., 46 F.3d at 325; Kathleen S. v. Dep't of Pub. Welfare of Comm. of Pa., 10 F. Supp. 2d 460, 467 (E.D.Pa.1998). Defendants' assertion, that Congress could not have meant to require a state to provide community services where a state has insufficient resources to "satisfy the entire demand for such services," Williams v. Secretary of the Executive Office of Human Servs., 414 Mass. 551, 609 N.E.2d 447, 452 (1993), does little to advance their claim that they have no duty to provide community services as a matter of law. The Third Circuit's opinion in Clark v. Cohen, 794 F.2d 79 (3d Cir.1986), upon which Williams relied, was later clarified by the Third Circuit itself. Clark, which denied relief based on the ADA and the Rehabilitation Act and found no affirmative obligation for the state to furnish services, was explicitly not based on the integration mandate of the ADA. Helen L., 46 F.3d at 333-34. See also L.C. by Zimring, 138 F.3d at 897 ("where, as here, the State confines an individual with a disability in an institutionalized setting when a community placement is appropriate, the State has violated the core principle underlying the ADA's integration mandate."). The L.C. court also concluded that a state may not abdicate its duty to provide community placement, where appropriate, by claiming a lack of resources. Id. at 902. When a defendant seeks to raise what amounts to a cost defense, the court determined, it may only do so in limited circumstances where making the accommodations "`would fundamentally alter the nature of the service, program, or activity.'" Id. (quoting 28 C.F.R. § 35.130(b)(7)). In the present matter and at this phase in the litigation, the court cannot find as a matter of law that Plaintiffs have requested services that would require a fundamental alteration to the system. Compare Heartz v. Morton, No. 98-317-B (D.N.H. Feb. 24, 1999) (the court determined through a fact-intensive analysis, at the preliminary injunction stage in the litigation, that the plaintiffs care in a three person community home designed to treat acquired brain disorder was so costly as to create a fundamental alteration in the system). That question must be reserved for another day. Because the integration mandate has been found in the past to create a judicially enforceable right, this court is unwilling to find that no such right exists as a matter of law. Naturally, Defendants have the right to renew this objection after the United States Supreme Court has spoken on the issue. At present, however, Plaintiffs' claim pursuant to the integration mandate, Count I, will be allowed to proceed forward. b. Plaintiffs also proceed under the nondiscrimination provision of the ADA, which provides a cause of action to any qualified individual with a disability be it mental retardation, developmental or any other who is denied participation in or the benefit of a public program because of that disability. 42 U.S.C. § 12132. The pertinent parts of the enabling regulation provide as follows: (b)(1) A public entity, in providing any aid, benefit or service, may not ... on the basis of disability (i) deny a qualified individual with a disability the opportunity to participate in or benefit from the aid, benefit or service; ... (iv) provide different or separate aids, benefits, or services to individuals with 238 disabilities or to any class of individuals with disabilities than is provided to others unless such action is necessary to provide qualified individuals with disabilities with aids, benefits, or services that are as effective as those provided to others. 28 C.F.R. § 35.130(b). Plaintiffs cite many cases for the proposition that the ADA prohibits a public entity from discriminating on the basis of disability in the provision of community based treatment and services. See, e.g., Helen L., 46 F.3d at 336; Cable v. Dep't of Dev. Servs., 973 F. Supp. 937, 942 (C.D.Cal. 1997); Williams v. Wasserman, 937 F. Supp. 524, 530 (D.Md.1996). Still, as Defendants assert, Plaintiffs must first allege and then prove that they are "qualified" disabled individuals within the meaning of the statute in order to assert a deprivation of rights thereunder. Moreover, the ADA explicitly recognizes that a public entity may impose eligibility requirements on the provision of services to disabled individuals. Easley by Easley v. Snider, 36 F.3d 297, 302 (3d Cir.1994). Plaintiffs allege in their amended complaint that "many of the named plaintiffs and other members of the plaintiff class are currently entitled to active treatment and other services in ICF/MRs." (Am. Compl. ¶ 78.) Various class members are also allegedly qualified to receive services through the home and community based waiver ("HCBW") program. (Am. Compl. ¶¶ 190-192.) Finally, Plaintiffs allege, even if they fail to meet eligibility requirements for such services, they could meet those requirements with reasonable modifications in the "policies, practices or procedures," as are contemplated by implementing regulations of the ADA. See 28 C.F.R. § 35.130(b)(7). See also 42 U.S.C. § 12131(2). The court cannot say, as a matter of law and based solely on the allegations in the complaint, that the claimed exclusion of Plaintiffs from community-based treatment in intermediate care facilities for the mentally retarded ("ICF/MR") and from HCBW services, as Plaintiffs allege, are grounded upon nondiscriminatory reasons, as Defendants assert. The court finds sufficient factual predicates to support the claimed violations to withstand the motion to dismiss now before the court. As Defendants must per force acknowledge, an exclusion from services may be actionable whether or not the public entity intended to discriminate. Otherwise, this nondiscrimination provision would be rendered meaningless. See L.C. by Zimring, 138 F.3d at 902; Tyler v. City of Manhattan, 118 F.3d 1400, 1407 (10th Cir.1997); Martin, 840 F.Supp. at 1191-92. The court will therefore deny Defendants' motion to dismiss Count II. 3. Defendants also seek to dismiss Plaintiffs' claims under various parts of the Medicaid statute, namely, the comparability, the reasonable promptness and the freedom of choice provisions. a. The comparability provision requires that all Medicaid services, except those services provided under the HCBW program be furnished equitably. Accordingly, similarly situated individuals, whether they be categorically needy that is, receiving Supplemental Security Income as claimed with regard to the entire plaintiff class or medically needy, must receive comparable services. 42 U.S.C. § 1396a(a)(10)(B); Schweiker v. Hogan, 457 U.S. 569, 573-74, 102 S. Ct. 2597, 73 L. Ed. 2d 227 (1982). Some courts have also held that the comparability provision is violated if there is a disparity of treatment among the categorically needy even when those individuals have differing disabilities. See White v. Beal, 555 F.2d 1146, 1151-52 (3d Cir.1977); Parry By and Through Parry v. Crawford, 990 F. Supp. 1250, 1257 (D.Nev.1998). See generally Sobky v. Smoley, 855 F. Supp. 1123, 1140-41 (E.D.Cal.1994) (citing cases). 239 Defendants' motion to dismiss Plaintiffs' comparability claims is grounded in their assertion that the class members have no appropriate comparator. Accordingly, Defendants claim, Plaintiffs cannot be deemed to have been denied services provided to others who are similarly situated, a prerequisite for redress under this provision. Specifically, Defendants contend that the needs of the various class members are extremely individualized and these "individual needs are vastly different from each other and, therefore, are likely to be vastly different from the persons who are receiving the services that the plaintiffs seek to require the defendants to provide." (Def.Mem. (Docket No. 37) at 23.) As a result, Defendants maintain, Plaintiffs' claims do not rise to the level of judicially enforceable rights and must be dismissed. In support, Defendants also cite King by King v. Fallon, 801 F. Supp. 925, 934 (D.R.I.1992). After a full bench trial, the King court rejected claims of unequal provision of Medicaid services. The court concluded that plaintiffs failed to provide sufficient evidence "to contravene Defendants' assessments of the various Plaintiffs' medical needs." Id. As a result, the court determined that it "simply ha[d] no basis for comparing the haves with the have-nots." Id. Defendants contend that they are entitled to the same result here. As is evident, however, the case at bar is in a significantly different procedural posture, no trial having yet occurred. Suffice it to say, at this point in time Plaintiffs have pled their claim sufficiently. (Am. Compl. ¶¶ 63-66, 72-78.) The court is similarly unconvinced that the distinction which Defendants seek to draw between this case and Sobky is material for purposes of their motion to dismiss. As Defendants maintain, the harms claimed by the plaintiff class in Sobky were undoubtedly exacerbated by the fact that the class members, although eligible, received no Medicaid-funded methadone treatment services whatsoever. Here, Defendants point out, there is no dispute that the members of Plaintiff class are receiving varying Medicaid services. In the court's opinion, that difference is not dispositive. At the very core of both Sobky and Plaintiffs' claims here are allegations that the respective states failed to provide certain necessary Medicaid services. The instant complaint alleges that eligible individuals, with similar degrees of impairment, albeit different disabilities, are not receiving equal access to Medicaid. In particular, Plaintiffs claim that individuals residing in ICF/MRs receive active treatment to prevent them from losing certain important skills, while those individuals residing in nursing facilities are not receiving ample services. (Am.Compl. ¶ 52, 72-78.) Similarly, Plaintiffs contend that the state excludes eligible individuals with cognitive as opposed to physical disabilities from its Personal Care Attendant ("PCA") services. (Am.Compl. ¶¶ 62-66.) At bottom, Plaintiffs' complaint supports a cognizable claim of a violation of the comparability provision of Medicaid, Count III.[1] b. Defendants also seek to dismiss Plaintiffs' claim that they have violated Medicaid's reasonable promptness provision. Defendants' argument parallels their arguments with respect to the other statutory provisions which Plaintiffs seek to enforce under section 1983. In essence, "[t]he relevant question is whether the action ... whose reasonableness is commanded has been clearly delineated and is 240 susceptible of judicial enforcement." Sobky, 855 F.Supp. at 1147 (quoting Albiston v. Maine Comm'r of Human Servs., 7 F.3d 258, 267 (1st Cir.1993)). The relevant portion of the Medicaid statute, 42 U.S.C. § 1396a(a)(8), provides that "[a] state plan for medical assistance must ... provide that all individuals wishing to make an application for medical assistance under the plan shall have the opportunity to do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals." The implementing regulations make clear that no undue delay may occur in the application process for services. 42 C.F.R. § 435.911(a)(1), (2) and (e)(1). Their previous arguments to the contrary, Defendants more or less concede in their supplemental memorandum, (Docket No. 56), that the reasonable promptness provision extends beyond the application process itself to the provision of services as well. See Doe By and Through Doe v. Chiles, 136 F.3d 709, 721 (11th Cir.1998). Likewise, the reasonable promptness provision has been held to apply to services which a state has opted to provide, not just those services which are federally mandated. Tallahassee Mem'l Reg'l Med. Ctr. v. Cook, 109 F.3d 693, 698 (11th Cir.1997). Only when a state seeks a necessary waiver from provision of certain services may it be excused from compliance with the reasonable promptness portion of the statute, at least in part. 42 U.S.C. §§ 1396n(c)(4)(A) and (c)(3) and (9). Looking to the four corners of the complaint, the court can plainly see that Plaintiffs have adequately alleged that Defendants have not sought the necessary waiver of the reasonable promptness requirement. (Am.Compl. ¶ 85.) Plaintiffs also allege that at least nine hundred class members have not been provided medically necessary services in a timely manner. (Am.Compl. ¶¶ 106, 108.) Granted, before receiving redress, Plaintiffs must prove that the services alleged to have been untimely provided were unreasonably untimely. At this point in the litigation, however, it is too early to make that determination. The court will therefore allow the claim in Count IV to go forward. c. Plaintiffs assert that the individual class members remain in nursing facilities at present and have not been informed of existing alternatives to nursing facilities in violation of the pertinent freedom of choice provisions of the Medicaid statute. The pertinent statutory language provides that "... such individuals who are determined to be likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded...." 42 U.S.C. § 1396(c)(2)(C). In response, Defendants aver that Plaintiffs' allegations fail to state a cognizable claim. At the core of Defendants' argument is the assertion that there are no feasible alternatives available which are presently denied to eligible claimants. Indeed, the Medicaid statute requires a state to provide only feasible alternatives and allows it broad latitude to choose the appropriate services for the appropriate claimant. Alexander, 469 U.S. 287, 307, 105 S. Ct. 712, 83 L. Ed. 2d 661 (1985). Even giving the case law a most generous reading in Plaintiffs' favor, Defendants argue, the freedom of choice provision does not offer the broad affirmative mandate which Plaintiffs suggest. See Martinez v. Ibarra, 759 F. Supp. 664, 669 (D.Colo.1991) ("The first requirement forces states to disclose care options accurately to potential recipients Those alternatives must be feasible."). Rather, Defendants asserts, the statutory provision appears instead to be a "negative command of non-interference" with an individual's available choices. King, 801 F.Supp. at 932. If, for example, 241 a choice is, economically or logistically infeasible, Defendants continue, the state need not create availability where it simply does not exist. Despite Defendants' arguments, it is the court's opinion that Plaintiffs have pled sufficient facts to survive Defendants' motion to dismiss the freedom of choice claims. In their amended complaint, Plaintiffs allege that there are a number of feasible alternatives to nursing facility care available in Massachusetts, namely, "residential habilitation, day services, family support, respite services and transportation." (Am.Compl.¶ 187.) Plaintiffs also adequately allege that "Defendants' administration of the Medicaid program denies plaintiffs and plaintiff classmembers their freedom of choice by failing to inform them of the feasible alternatives to Medicaid-funded nursing facilities, including ICF/MR, PCA and HCBW programs, and failing to implement their choices for Medicaid services, all in violation of 42 U.S.C. § 1396n(c)(2)(C)." (Am.Compl.¶ 188.) The breadth of the freedom of choice provision remains to be seen. It likewise remains to be demonstrated whether the programs which Plaintiffs allege to have been denied are, in fact, feasible alternatives to nursing facility care. If those claims cannot be substantiated, Defendants' assertion that Plaintiffs are calling for an inappropriate expansion of various programs will become palpable. At this point in the litigation, however, there are sufficient allegations that some feasible alternatives to nursing facilities exist and that Plaintiffs are being denied a meaningful choice as to their participation therein. Accordingly, the court will deny Defendants' motion to dismiss as it relates to Count V.[2] B. Jurisdictional Issues 1. Plaintiffs rely on Bogard v. Kustra, No. 88-C-2414 (N.D.Ill. May 4, 1980), for the proposition that the organizational plaintiffs, ARC and Stavros, have standing to pursue the instant claims on their own behalf. See also Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S. Ct. 2434, 53 L. Ed. 2d 383 (1977). In Bogard, an organization similar to ARC was found to have standing to pursue claims much like those advanced here. Recently, however, the doors to the federal courts have been closing to increasing numbers of organizations. As the Supreme Court explained in Lujan v. Defenders of Wildlife, 504 U.S. 555, 562, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992), "when the plaintiff is not himself the object of the government action or inaction he challenges, standing is not precluded but is ordinarily `substantially more difficult' to establish." Relying on Lujan, Defendants assail the claims made by the organizational Plaintiffs, maintaining that they have no standing to pursue their claims as they themselves have suffered no injury-in-fact, a necessary prerequisite for organizational standing. Lujan, 504 U.S. at 560, 112 S. Ct. 2130. To have standing, whether based on an associational or representative theory, an organizational plaintiff must plead specific facts that will demonstrate, if proven, the existence of a harm that "directly" affects one or more of its members. Id. at 563, 112 S. Ct. 2130 (quoting Sierra Club v. Morton, 405 U.S. 727, 735, 739, 92 S. Ct. 1361, 31 L. Ed. 2d 636 (1972)). In the court's estimation, Plaintiffs' pleadings meet the standards set forth in Lujan. As to ARC, Plaintiffs have pled that it "is a statewide non-profit organization comprised of persons with mental retardation, their parents and friends, and mental retardation professionals...." (Am.Compl.¶ 22.) In addition, Plaintiffs 242 assert that "ARC Massachusetts is dedicated to ensuring that all citizens with mental retardation in the Commonwealth are afforded appropriate services and supports in the most integrated, home-like setting possible, and that all persons with mental retardation and other developmental disabilities and their families have meaningful choices about the nature and location of those services. ARC Massachusetts, as a statewide advocacy organization, has long monitored the actions of the defendants in order to ensure that persons with mental retardation and other developmental disabilities receive the services to which they are entitled." (Id.) To the extent that Plaintiff class members are also members of ARC, they have already been determined to have alleged sufficient injury as described in Lujan. As to Stavros, Plaintiffs assert that it assists individuals living in the community by using federal and state funds to provide services to increase their independence. In this capacity, "Stavros is required to file annual reports concerning the number of persons who they assist to move from institutions to community with the Rehabilitation Services Administration ("RSA"), the federal agency responsible for independent living centers." (Am.Compl.¶ 23.) According to Stavros, its funding is determined by the RSA and Defendants have impeded its ability to carry out federal mandates and have jeopardized its funding. (Id.) While it remains to be seen whether Stavros has suffered a quantifiable harm, as required by Lujan, at this juncture Plaintiffs have, at a minimum, pled that it has. The court also does not agree with Defendants that Plaintiffs have conceded that the requirement of "individualized proof" of necessary relief defeats their claims of organizational standing. While it is true that "associational standing is properly denied where ... the need for individualized proof so pervades the claim that the furtherance of the members' interests requires individual representation," Concerned Parents to Save Dreher Park Center v. City of West Palm Beach, 884 F. Supp. 487, 489 (S.D.Fla.1994), that is not the case here. The court has already determined that Plaintiffs' claims are appropriate, if not preferable, for class-based adjudication, making individual representation unnecessary. While each class member may require an individual needs assessment were relief granted, this is not a claim which requires individualized proof as to the claimed violations or compliance with the various statutes at issue. Cf. id. at 489. Nor is this a case in which Plaintiffs seek to "shoehorn" an unascertainable number of victims into their claim by way of organizational standing. Id. Again, the court made a determination to the contrary when it allowed Plaintiff's motion to certify a class. In sum, the court finds that ARC and Stavros have standing. 2. Finally, Defendants assert that the pleadings are insufficient to support a cognizable claim against various named defendants, including the Governor, A & F, EOHHS, a DMR regional Director, DPH and MRC, insofar as they are not named in any pertinent counts of the complaint. Accordingly, Defendants ask that the claims against those defendants be dismissed as they cannot be deemed aware of the precise nature of the cause of action brought against them as is required by Federal Rule of Civil Procedure 8(a). Rule 8(a) necessitates a short plain statement of the basis for relief. While the court agrees that the original complaint was rather thin as to several defendants, the court finds sufficient facts in Plaintiffs' amended complaint to apprise all Defendants of the claims against them. (Am.Compl.¶¶ 25, 31(a), 41(a) and (b), 42(a), 99(a).) Given the notice-pleading standard, there can be little dispute at this juncture that Defendants are, at the very least, on notice of the claims advanced. 243 The court is also unconvinced by Defendants' substantive challenge to the inclusion of the Governor and EOHHS as defendants to certain of Plaintiffs' claims. In essence, Defendants assert that, because a single state agency, the DMA, is responsible for compliance with the Medicaid statutes, the Governor and EOHHS have no role whatsoever in the supervision and administration of the state's Medicaid plan. Accordingly, Defendants claim, the Governor and EOHHS are impermissible defendants as to all counts except those regarding the ADA, Counts I and II. The single state agency mandate arose out of Congress' desire to minimize the improper denial of benefits and to ensure a certain level of services and quality of care. Morgan v. Cohen, 665 F. Supp. 1164, 1177 (E.D.Pa.1987). The mandate accomplishes these goals by limiting the authority to make administrative decisions to a single state agency. 42 C.F.R. § 431.10(e)(1)(ii). However, while the "single state agency" requirement derives from a desire to focus accountability for plan operation, Hillburn by Hillburn v. Maher, 795 F.2d 252, 261 (2d Cir.1986); 42 U.S.C. § 1396a(a)(5); 42 C.F.R. §§ 431.1 and 431.10, it strains reason to conclude here that it is only DMA which may be held responsible as a matter of law for failures necessarily attributable to other state agencies. See generally King by King v. Sullivan, 776 F. Supp. 645, 656-57 (D.R.I.1991). The court cannot imagine that such a narrowly drawn requirement was intended to foreclose any recourse when other public entities may be found to have violated federal law. Stated another way, if an official fails to enforce the various statutory provisions which will ensure the delivery of needed services within his or her authority, that official should be held accountable for the failure. Those cases cited by Defendants and still others found by the court do not indicate otherwise. No case holds that the provision which empowers a single state agency to administer a state's Medicaid program was in any way promulgated with the intention of exonerating or limiting the liability of other governmental officials who fail to conform their required actions to federal law. Of course, it remains to be seen whether Plaintiff can prove that the Governor and EOHHS have a role in the provision of Medicaid services above and beyond the role of the DMA. Granted, at this point, the full extent of duties of each official in the context of the intertwined provisions of federal law is unclear to the court. Still, Plaintiffs have pled at least that several unfulfilled administrative duties may fall outside the DMA's mandate. By way of example, Plaintiffs assert that the Governor "is responsible for seeking funds from the legislature as well as directing, supervising and controlling the executive departments of state government." (Am. Compl. ¶ 24.) He also appoints all the directors of the executive agencies. (Id.) Similarly, EOHHS is alleged to be "responsible for the oversight, supervision, and control of the health and human services departments within the executive branch including DMA" and the other Defendants. (Am.Compl.¶ 26.) To the extent that those responsibilities go beyond those enumerated and required in the state Medicaid plan, the Governor and EOHHS may well be appropriate defendants as to those counts. Again, at a minimum, there appears to be no dispute that they are appropriate defendants with regard to the ADA. III. CONCLUSION For the foregoing reasons, the court will deny Defendants' motion to dismiss in its entirety. NOTES [1] With regard to Defendants' challenge, specific to this claim, to Plaintiffs' standing, it appears to the court that Plaintiffs have also sufficiently alleged that certain class members are being deprived specialized services in general and ICF/MR services in particular in violation of the Medicaid act. There appears to be sufficient injuries-in-fact pled to provide the necessary standing at this juncture. It is of no moment that some individual class members may not want ICF/MR services. [2] Defendants' assertions at oral argument notwithstanding, Plaintiffs have not conceded a lack of viability with regard to their claims in Counts VI and VII. Since Defendants do not wage an independent attack with regard to these counts in their motions to dismiss, the court will allow those claims to go forward.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2758709/	COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH NO. 02-13-00543-CR Jose Alcala § From Criminal District Court No. 1 § of Tarrant County (1308695D) v. § December 4, 2014 § Opinion by Justice Gardner The State of Texas § (nfp) JUDGMENT This court has considered the record on appeal in this case and holds that there was no error in the trial court’s judgment. It is ordered that the judgment of the trial court is affirmed. SECOND DISTRICT COURT OF APPEALS By __/s/ Anne Gardner__________ Justice Anne Gardner	01-03-2023	12-09-2014
https://www.courtlistener.com/api/rest/v3/opinions/1838230/	52 Mich. App. 470 (1974) 217 N.W.2d 405 CARTER v. KELSEY-HAYES COMPANY Docket No. 17417. Michigan Court of Appeals. Decided March 29, 1974. Kozlow, Jasmer & Woll, P.C. (by John L. Crowley), for plaintiff. Lacey & Jones (by Hayim I. Gross), for defendant. *471 Before: V.J. BRENNAN, P.J., and McGREGOR and T.M. BURNS, JJ. PER CURIAM. Plaintiff was granted workmen's compensation benefits following a hearing before a referee in July, 1967. After a lengthy appeal process culminating in the decision of the Michigan Supreme Court, Carter v Kelsey-Hayes Company, 386 Mich 610; 194 NW2d 326 (1972), the defendant paid plaintiff approximately $22,000, representing payments which had accrued during the pendency of the appeal. Within six months of this payment, the defendant discovered that reductions authorized by MCLA 418.357; MSA 17.237(357) had not been computed, and petitioned for reimbursement of this overpayment. The referee ruled that the statute prohibited recovery of the overpayment for the period more than one year prior to the date of the defendant's claim. The Workmen's Compensation Appeal Board modified the referee's decision and allowed recovery of the total overpayment. Plaintiff was granted leave to appeal to this Court on September 10, 1973. The limitation provisions of MCLA 418.833; MSA 17.237(833) do not bar recovery of the entire amount by which the plaintiff was overpaid. That statute is not literally applicable to the facts of this case, and its operation was tolled during the pendency of the original appeal. White v Michigan Consolidated Gas Co, 352 Mich 201, 212; 89 NW2d 439 (1958). See also Samels v Goodyear Tire & Rubber Co, 323 Mich 251, 256-259; 35 NW2d 265 (1948). The order of the Workmen's Compensation Appeal Board is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2017158/	174 N.W.2d 134 (1970) Victor ANDREWS, Relator, v. O'Dean HOSS, d. b. a. Clark's Filling Station, et al., Respondents. No. 41745. Supreme Court of Minnesota. January 23, 1970. Jack DeVaughn, Minneapolis, for relator. Robb, Van Eps & Gilmore, Minneapolis, for respondents. Heard before KNUTSON, C. J., and OTIS, ROGOSHESKE, SHERAN, and FRANK T. GALLAGHER, JJ. OPINION PER CURIAM. Certiorari to review an order of the Workmen's Compensation Commission denying benefits to employee-relator. The sole issue is whether the evidence sustains the commission's factual determination that the employee's injury resulting from a fellow employee's assault by gunshot did not arise out of and in the course of his employment. The employee worked as a part-time service station attendant. While on the premises of the employer's service station at 1 a. m., March 24, 1967, following an argument with one Nick Taylor (a fellow employee who was on duty) and an altercation and scuffle with Taylor's brother-in-law, employee was shot in the back by Taylor with a .25-caliber pistol. The pistol was furnished by employer to his employees for protection against intruders. The question of whether employee was entitled to benefits turned on whether the argument, 135 altercation, and shooting arose out of the employee's accusation that Taylor was the cause of a $13 shortage of sales receipts belonging to the employer, and was therefore in the course of employment, or out of a purely personal argument with Taylor's brother-in-law, with whom the employee was engaged in fighting immediately preceding the shooting. The record makes clear that the evidence concerning the hours employee worked preceding the shooting, the cause of his quarrel with Taylor, and the exchange of blows and scuffle with Taylor's brother-in-law, as well as the conduct of the parties involved leading up to the shooting, was in irreconcilable conflict. As the commission observed, every witness "had a materially different version of the events," and employee's testimony especially "by his own admission, contains much evidence of a lapse of memory." Mindful of an employee's right to benefits for injury resulting from a work-induced altercation even though the injured employee is the instigator or the aggressor, Petro v. Martin Baking Co., 239 Minn. 307, 58 N.W.2d 731; Jolly v. Jesco, Inc., 271 Minn. 333, 135 N.W.2d 746, the commission, assuming the most favorable view of employee's testimony, nevertheless concluded that he had not sustained his burden to prove an employment-related assault. Jones v. Schiek's Cafe, 277 Minn. 273, 152 N.W.2d 356. Both from a favorable view of employee's testimony and from a consideration of the evidence as a whole, we entertain no doubt that there is more than ample evidence to support the commission's decision. Affirmed. MURPHY, Justice (dissenting). I respectfully dissent. The referee who heard the witnesses stated in his memorandum: " * * [T]he argument, altercation and eventual shooting arose from the fund shortage or the ejection from the premises and appears to be work related under either version and thus within the scope of the Workmen's Compensation Act. It would seem a little more weight should be given to the petitioner's version of the argument as the assailant subsequently admitted pilfering funds and made restitution." I would reverse under authority of Blattner v. Loyal Order of Moose, 264 Minn. 79, 117 N.W.2d 570; Simonson v. Knight, 174 Minn. 491, 219 N.W. 869; and Olson v. Trinity Lodge, 226 Minn. 141, 32 N.W. 2d 255.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/3119306/	Order entered November ,2012 In The No. 05-12-01522-CR EX PARTE KEITH D. ROANE On Appeal from the County Court at Law No. 3 Collin County, Texas Trial Court Cause No. 003-86164-04 ORDER The Court has received appellant’s notice of appeal from the trial court’s denial of his article 11.072 application for writ of habeas corpus. We ORDER the Collin County Clerk to file the clerk’s record containing the documents related to appellant’s application for writ of habeas corpus, the trial court’s written order ruling on appellant’s application, and the trial court’s certification of appellant’s right to appeal. The clerk’s record is due by DECEMBER 3, 2012. We ORDER appellant to file his brief by DECEMBER 21, 2012. We ORDER the State to file its brief by JANUARY 7, 2013. No extensions will be granted. If any party’s brief is not filed by the date specified, the appeal will be submitted without that party’s brief. See TEX. R. APp. P. 31.1 The appeal will be submitted without oral argument on February 1, 2013 to a panel consisting of Justices Bridges, O’Neill, and Murphy. See TEX. R. APe. P. 31.3. We DIRECT the Clerk to send copxes of this order, by electronic transmission, to the following: ¯ Honorable Lance Baxter, Presiding Judge, County Court at Law No. 3; ¯ Collin County Clerk; and ¯ Collin County District Attorney’s Office. We DIRECT the Clerk to send a copy of this order, by first-class mail, to Keith D. Roane, 809 Lake Place, Azle, Texas 76020. LANA MYERS JUSTICE	01-03-2023	10-16-2015
https://www.courtlistener.com/api/rest/v3/opinions/1595747/	399 So. 2d 1358 (1981) W. Gus BEANE v. Chalmas E. BOWDEN, III. No. 52586. Supreme Court of Mississippi. June 3, 1981. Rehearing Denied July 8, 1981. 1359 Howard Q. Davis, Jr., Clark, Davis & Belk, Indianola, for appellant. Charles C. Jacobs, Jr., Jacobs, Griffith, Pearson, Eddins & Povall, Cleveland, for appellee. En Banc. PATTERSON, Chief Justice, for the Court: W. Gus Beane, d/b/a Beane Cotton Company, brought suit in the Circuit Court of Sunflower County; and thereafter the cause was transferred to the Circuit Court of the Second Judicial District of Bolivar County. Beane sought judgment on a debt of $28,748.60 together with interest at the rate of 6 percent per annum from July 24, 1970, and all costs. This debt arose from a joint venture entered into between Gus Beane Appellant, and Chalmas E. "Pete" Bowden, Jr., now deceased and father of Appellee, Chalmas E. "Skip" Bowden, III. Beane alleged Skip Bowden and his late father were doing business as a partnership at the time the joint venture was entered into between Beane Cotton Co. and Bowden Cotton Co. Hence Beane seeks to hold Skip Bowden liable on half the debt incurred by the joint venture between the two cotton companies. Skip Bowden denied the existence of a partnership at the time the joint venture was agreed upon and thus asserts non-liability for the debt incurred by his father and Beane. The case was tried to the court and taken under advisement on January 4, 1978. Judge Feduccia died on October 27, 1978, prior to deciding the case. More than six months having passed with no adjudication, Beane appealed to this Court pursuant to the provisions of MCA § 11-1-17 (1972). Although over a year elapsed between the death of the trial judge and the bringing of this appeal, we consider the case on its merits, albeit with reservations, because appellee did not challenge the jurisdiction of this Court to conclude the case. We do now what the trial court should have done within a reasonable time following submission of the case and the filing of 1360 briefs. See Beall v. Beall, 310 So. 2d 706 (Miss. 1975). The status of Beane is that of an appellant, and he assigns four errors for the court's determination. I. Appellee Chalmas E. (Skip) Bowden, III was, in fact, a partner in the firm known as Bowden Cotton Company, but if not, he held himself out as a partner to the public in such manner that he should now be estopped to deny that he was a partner. II. Even were Chalmas E. (Skip) Bowden, III not a partner in Bowden Cotton Company, his actions following the death of his father were sufficient to cause him to be indebted to W. Gus Beane, Appellant. III. The action is not barred by Section 729 of the Mississippi Code of 1942 (now Section 15-1-29 of the Mississippi Code of 1972). IV. The action is not barred by Section 264 of the Mississippi Code of 1942 (now Section 15-3-1 of the Mississippi Code of 1972) as being a verbal agreement intended to be carried out over a period of time in excess of fifteen months. Beane and Pete Bowden, appellee's father, entered into a joint venture agreement, speculative in nature, whereby Beane, a cotton merchant, would purchase cotton and Pete Bowden, d/b/a Bowden Cotton Co., would class and ship the cotton. This oral agreement of 1966 had no definite date for its termination. It was Beane's understanding that the joint venture was between the two cotton merchant companies, Bowden Cotton Co. and Beane Cotton Co. Pete Bowden died in April 1968, at which time the joint venture was $5000 in debt. Appellant contends Skip Bowden was, in fact, a partner in the firm known as Bowden Cotton Co.; and if he was not a partner, he has held himself out as a partner to the general public in such a manner that he should be estopped to deny it. We do not reach the estoppel issue; for it is our opinion the evidence, both oral and written, heavily preponderates to the conclusion that Skip Bowden was, in fact, a partner in Bowden Cotton Company and thus is liable for half the debts of the joint venture between Beane Cotton Company and Bowden Cotton Company. A partnership is defined in MCA § 79-12-11 (Supp. 1980) as "an association of two (2) or more persons to carry on as copartners a business for profit." Although Skip Bowden denies he was a partner but was only employed as a cotton classifier, the documentary evidence positively shows that Bowden received profits from the Bowden Cotton Company in 1966 and 1967, prior to Pete Bowden's death. On Skip Bowden's 1966 and 1967 federal income tax returns, his occupation is listed as a cotton merchant with no salary reported as income. His income is listed as that of a partnership, specifically: "C.E. Bowden, Jr. & C.E. Bowden, III, Joint Venture, d/b/a Bowden Cotton Co." This constitutes prima facie evidence that he was a partner in the business, for MCA § 79-12-13(4) (Supp. 1980) provides that "receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, ... ." We are also of the opinion that the fact Pete Bowden acted on his own when entering into the joint venture agreement with appellant would not make Skip Bowden any less liable because this Court has long recognized the principle that one partner, acting alone, can bind the other partner, if it is within the scope of the partnership. Picone v. Commercial Paste Co., 215 Miss. 114, 60 So. 2d 590 (1952); Baker v. Connecticut General Life Ins. Co., et al., 196 Miss. 701, 18 So. 2d 438 (1944). It is not necessary to consider the second assignment of error because of our determination from the record that Skip Bowden was a partner in Bowden Cotton Co. Turning to appellant's third assignment of error that the action is not barred by MCA § 729 (1942), presently MCA § 15-1-29 (Supp. 1980), this statute provides: § 15-1-29. Limitations applicable to actions on accounts and unwritten contracts. *1361 Except as otherwise provided in the Uniform Commercial Code, actions on an open account or account stated not acknowledged in writing, signed by the debtor, and on any unwritten contract, express or implied, shall be commenced within three (3) years next after the cause of such action accrued, and not after, except that an action based on an unwritten contract of employment shall be commenced within one (1) year next after the cause of such action accrued, and not after. We think the oral agreement is not void under the three year statute of limitations. This was a mutual, open account between cotton merchants, and the statute of limitations did not begin running until the "true date of the last item proved in the account." MCA § 15-1-31 (1972). Based on the declaration and proof, the last transaction was on July 24, 1970. Although the exact date of the filing of the declaration is not ascertainable from the record, a subsequent motion to transfer by appellee was dated December 12, 1972. We are of the opinion this would place the filing of Beane's declaration well within the three year statute of limitations. Appellant also assigns as error that the action is not barred by MCA § 264 (1942), presently MCA § 15-3-1 (1972), as being a verbal agreement intended to be carried out over a period of time in excess of fifteen months. We are of the opinion that appellant's contention is correct for "the possibility of performance within fifteen months takes the contract out of the operation of the statute." Morgan v. Jackson Ready-Mix Concrete, 247 Miss. 863, 157 So. 2d 772 (1963); See also Jones v. McGahey, 187 So. 2d 579 (Miss. 1966). Here, the oral contract was of an indefinite duration and susceptible of performance within 15 months, thus removing it from the statute of frauds. In addition, the statute of frauds does not apply where a contract has been performed by both parties. The present joint venture agreement was substantially performed. E.g., Landry v. Moody Grishman Agency, Inc., 254 Miss. 363, 181 So. 2d 134 (1965). We reverse and render judgment for appellant in the amount of $28,748.60, together with interest at the rate of 6 percent per annum from July 24, 1970, until paid, and all costs. REVERSED AND RENDERED. SMITH and ROBERTSON, P. JJ., and SUGG, WALKER, BROOM, LEE, BOWLING and HAWKINS, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2017182/	174 N.W.2d 339 (1970) 185 Neb. 202 Deryle SEEFUS, Appellee, v. Willard BRILEY and Emma E. Briley, Appellants. No. 37344. Supreme Court of Nebraska. February 20, 1970. 341 Baylor, Evnen, Baylor, Urbom & Curtiss, Lincoln, Vantine A. James, Nebraska City, for appellants. Wellensiek, Morrissey & Davis, Nebraska City, for appellee. Heard before WHITE, C. J., and CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN and NEWTON, JJ. CARTER, Justice. This is an appeal from a judgment of the district court for Otoe County quieting title to a vacated alley in Nebraska City in the plaintiff, enjoining the defendants from encroaching thereon, and awarding damages to the plaintiff. The defendants have appealed. The record discloses that the real estate involved in this action is within an area that was platted and accepted by the city in 1859. At all times herein mentioned, the platted area was described as Elmwood Addition to Nebraska City, Nebraska. On November 22, 1960, defendants became the owners of Lots 1, 2, 3, 4, 5, and 6, Block 29, Elmwood Addition. On February 15, 1966, plaintiff became the owner of Lots 9, 10, 11, and 12, Block 29, Elmwood Addition. Between the two tiers of lots purchased by these parties was an east-west alley, 16.5 feet in width. On June 6, 1955, the alley was vacated by ordinance of the city council of Nebraska City which vacation ordinance was never filed in the office of the register of deeds. In early 1966, plaintiff made inquiry of the city council about improving the alley and was informed that it was vacated. He then obtained deeds to the north and south halves of the vacated alley from those owning the abutting lots at the time the alley was vacated. It is the contention of plaintiff that the sale of lots by lot and block numbers alone does not convey title to half of the abutting vacated alley unless specifically included. The defendants contend that a conveyance by block and lot numbers includes the abutting half of a vacated alley unless it is specifically reserved. This is the primary issue in the case. Nebraska City is a city of the first class and is controlled by the laws governing cities of such class. The applicable statute states: "Upon the vacation of any street, avenue or part of either, the same so vacated shall be and remain the property of the city, but may be sold and conveyed by the city for any price that shall be agreed upon by the mayor and three-fourths of the city council. When an alley is vacated the same shall revert to the owner of the adjacent real estate one half 342 on each side thereof except that when any alley is taken wholly from one or more lots, upon the vacation thereof, it shall revert to the owner or owners of the lot or lots from which it was originally taken." Section 16-611, R.R.S.1943. It will be noted that the first part of the statute deals exclusively with streets and avenues while the second part deals only with the vacation of alleys. According to this statute, when an alley is vacated, it reverts, under the facts before us, one-half to the abutting lots on each side of the alley. The parties to the litigation appear to be in agreement that the second part of section 16-611, R.R.S.1943, is the controlling statute in the instant case. The dispute arises as to whether or not a conveyance by lot and block number, as shown by the dedication and plat, conveys the one-half of the abutting alley, or whether or not the reversion of the abutting one-half of the vacated alley creates a separate and distinct tract that must be transferred by separate words of conveyance. In Hoke v. Welsh, 162 Neb. 831, 77 N.W.2d 659, this court said: "The general rule has been stated as follows: `Where a map, plat, plan or survey of the premises conveyed is adequately referred to in a deed, usually it is to be considered as a part of the latter instrument and construed in connection therewith; and the courses, distances, or other particulars which appear on such map, plat, plan, or survey, are, as a general rule, to be considered as the true, or part of the true, description of the land conveyed.' * * * Applying the foregoing rule, it is clear that the purport of the deed was to convey the title to the lots and one-half of the vacated streets and alleys to the purchaser as they are shown on the plat of the Original Town of Ogallala." In the Hoke case, the deed specifically followed the lot and block description with the additional words "now vacated." This case holds that such words carry with it the legal inference only that streets and alleys have reverted to the owners of the adjacent real estate, one-half on each side thereof, and brings into play the legal effects that attach to the description used by virtue of the vacation of the plat. The holding of the court is in effect a holding that the conveyance by block and lot number includes the adjacent one-half of a vacated alley. In Hillerege v. City of Scottsbluff, 164 Neb. 560, 83 N.W.2d 76, it was said: "It is true, as appellant asserts, that it has been sometimes stated that the fee of the street is in the municipality. This form of statement was sufficient for the facts the court was then considering and it was not necessary for it to determine or precisely declare in those cases the exact nature of the ownership a city has of a street or the condition and qualification of its title. It is generally recognized that under legislation such as prevails in this state the title of a street vested in a municipality is not a fee simple title absolute but a qualified base or determinable fee and that the title which the municipality has is held in trust for the purposes for which the street is dedicated." The reasoning of this case is as applicable to an alley as to a public street. This principle is sustained in Dell v. City of Lincoln, 170 Neb. 176, 102 N.W.2d 62, wherein it is stated: "Plaintiffs now argue that the greatest possible interest which defendant city could possess after it annexed the village of Havelock, including Sixty-ninth Street, was a fee simple determinable title, subject to being determined or diverted upon vacation of the street by defendant, which has occurred, and that plaintiffs are owners in fee simple absolute of one-half such street adjacent to their real property. We agree." See, also, Belgum v. City of Kimball, 163 Neb. 774, 81 N.W.2d 205, 62 A.L.R.2d 1295. It is asserted by the defendants that the conveyance by block and lot number of real estate in accordance with a plat includes not only the generally recognized lot as described but also one-half of an alley abutting such property as shown on such 343 plat. With this we agree. The city does not own the alley in fee absolute, its interest being defined as a qualified base or determinable fee. Such city has such a title until the happening of the event which terminates its interest, in this case the vacation of the alley. While the vacation of the alley increased the interest of the owner in the estate from that which he had prior to the vacation, in common language, it was nothing more than the acceleration of a lesser interest that he already had. The plaintiff contends that the vacation of the alley created a new estate unaffected by conveyances subsequent to the vacation of the alley on the theory that land cannot be appurtenant to land. It appears to be a general rule that the title to land additional to that described in a conveyance cannot pass as a conveyance. But general rules do not always decide specific cases. Land may be conveyed without description when it is incidental or appurtenant to the grant when an intention to do so is established. Meier v. Maguire, 172 Neb. 52, 108 N.W.2d 397. "The inchoate right of the grantor to land, on vacation of a street, has been held to pass by a deed although not mentioned therein. The general rule is that when the owner of land abutting upon a street or highway or upon a body of water or watercourse conveys the land, the conveyance will carry title to and fix the boundaries of the grantor's land by the center of the street or highway or the thread of the body of water or watercourse if the grantor's title extends thereto, notwithstanding the land is described as being bounded by the road, highway, or watercourse." 23 Am.Jur.2d, Deeds, S. 258, p. 295. In Greenberg v. L. I. Snodgrass Co., 161 Ohio St. 351, 119 N.E.2d 292, 49 A.L.R.2d 974, the court said in the syllabus thereto: "Where the owner of a lot abutting on a street, which street is vacated during his ownership, conveys such lot by number and without reservation of any rights in the street, such conveyance transfers, in addition to the lot, all rights which the grantor may have acquired by reason of such vacation, even though the metes and bounds description in the conveyance extends only to the side of the street." See, also, Bradley v. Spokane & I. E. R. Co., 79 Wash. 455, 140 P. 688, L.R.A.1917C, 225; Spence v. Frantz, 195 Wis. 69, 217 N.W. 700. At the time the alley was vacated on June 6, 1955, Earl and May E. Faler were the owners of Lots 8, 9, 10, 11, and 12. On October 6, 1956, the Falers conveyed the Lots to Eloise A. Coatney, who, on February 15, 1966, conveyed lots 9, 10, 11, and 12 to the plaintiff. At the time of the vacation of the alley, Albert H. and Olive Pearl Schneider were the owners of Lots 1, 2, 3, 4, 5, and 6. On November 22, 1960, the Schneiders conveyed these lots to the defendants without reserving ownership to the north one-half of the alley. After trouble arose over the ownership of the vacated alley plaintiff obtained a warranty deed from the Schneiders to the north one-half of the alley and a quitclaim deed from Coatney on February 21, 1966, to the south one-half of the alley. Plaintiff bases his claim to the whole of the alley on the warranty and quitclaim deeds last mentioned. These two deeds were ineffective for any purpose since title to the vacated alley had already been conveyed, the south one-half to plaintiff and the north one-half to defendants by the lot and block descriptions contained in the plat and without a reservation of title in the vacated alley. We hold that the trial court was in error in quieting title to the whole of the alley in plaintiff and in enjoining the defendants from encroaching upon the north one-half of the alley. The basis for an award of damages to the plaintiff is likewise based on a misinterpretation of the law and will require a reconsideration in the light of this opinion. We reverse the judgment of the trial court and remand the cause with directions to quiet title to the vacated alley in 344 accordance with this opinion, to modify the award of injunctive relief accordingly, and to reconsider the question of damages in the light of the foregoing holdings. Reversed and remanded with directions.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2017153/	61 Ill. App.3d 428 (1978) 378 N.E.2d 364 THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. AUDEY F. LAKE (Impleaded), Defendant-Appellant. No. 14691. Illinois Appellate Court Fourth District. Opinion filed July 7, 1978. 429 Richard J. Wilson and David Bergschneider, both of State Appellate Defender's Office, of Springfield, for appellant. Thomas J. Fahey, State's Attorney, of Danville (Robert C. Perry and Robert J. Biderman, both of State's Attorneys Appellate Service Commission, of counsel), for the People. Judgment affirmed. Mr. JUSTICE MILLS delivered the opinion of the court: Literally caught red-handed Burglary jury guilty 4 to 12 years. The trial court is affirmed. Neither the facts nor the evidence are disputed. Lake, Smith, and Cronk drove to the company service center of Fleming Weller, Inc., in the early morning hours. Lake and Smith cut a hole in the fence surrounding the service center, kicked open the doors of the garage and a storage shed and stole a large, heavy, red toolbox and some equipment. After an attempt to sell the stolen goods, the police were apparently notified and they arranged for a surveillance. Their information was to the effect that three men driving a black-over-gold automobile had attempted to sell some stolen property. During the surveillance, the police officers observed Lake, Smith, and Cronk as they got out of a car which matched the automobile description. A few minutes later, all three of the men went to the rear of the automobile with another individual and when the trunk of the car was opened, the officers saw a large, red toolbox. All three (Lake, Smith and Cronk) were apprehended. The red toolbox (which bore the name of "T.S. Tatlock") was later identified by its owner as having been taken from the garage of Fleming Weller, Inc., where the owner was employed as a mechanic. Furthermore, a criminologist with the Illinois Bureau of Identification testified that certain footprints lifted from the doors of the garage and the storage shed displayed tread design 430 similar to those of the shoes worn by defendants Lake and Smith at the time of the arrest. Cronk an accomplice in the burglary turned State's evidence and testified on behalf of the prosecution at Lake's trial. Lake challenges not the quantum of proof, nor the evidence, nor his sentence. On only two issues does he ground this appeal: (A) the trial judge's limitation of his cross-examination of Cronk, the accomplice witness; (B) an inaccurate jury instruction. A Cronk was called to testify for the State and his testimony was essentially this: He had been a co-defendant in the case on trial; he was also charged with the burglary; he agreed to testify for the State; his attorney and the State's Attorney had entered into negotiations regarding his testimony; it was agreed that his charge would be dropped to theft under $150 in return for his testifying; and there had been no specific agreement as to his possible sentence. Defense counsel on cross-examination attempted to inquire further of Cronk about Cronk's understanding of the consequences of the plea agreement, including the respective sentencing differences between burglary and theft under $150, and whether Cronk understood that burglary is a felony and theft under $150 is a misdemeanor. The State objected and the trial court sustained that objection with these comments: "THE COURT: You may inquire whether he is being given an opportunity to plead to an offense which carries a lesser penalty if you wish but not get into what the penalty or how many years or anything of this type. That gets the point across on whether he is aware of the fact he is being allowed to plead guilty to an offense which carries a lesser penalty." Defense counsel then elicited from Cronk the accomplice's realization that he was pleading to a less serious offense and that he had been advised by his attorney that the plea agreement "was a good deal." In ruling on this point when it was again raised in the post-trial motion, the trial judge explained that he had sustained the objection since "it was the admitted intention of counsel to examine the witness with regard to his knowledge of the penalty attached to the exact crime charged against the defendant" and that "the prejudicial impact of the jury of allowing testimony of the exact penalty to go before them for the crime to which the defendant then stood charged would exceed the rather questionable benefit that would accrue to the defendant through the legitimate use of that same testimony." In the defendant's brief, he acknowledges the court's reasoning: "Although the trial court correctly realized that there was a possibility of prejudice by allowing the jury to learn the penalties 431 for burglary, in this case the defendant's right to confrontation is far more important than any possible prejudice." 1, 2 The trial judge correctly noted that any defendant is entitled to cross-examine a witness as to any matter which tends to explain, modify, or discredit his testimony, or which tends to show that his testimony might be affected by interest, bias, or motive to testify falsely. Although the scope of cross-examination is generally left to the trial court's discretion, the accused must be given wide latitude to establish bias or motive. (People v. Barr (1972), 51 Ill.2d 50, 280 N.E.2d 708.) And particularly wide latitude should be allowed where the witness is an accomplice. (People v. Bergeron (1973), 10 Ill. App.3d 762, 295 N.E.2d 228.) Where the defendant's theory is that the State's witnesses are unbelievable, it is reversible error not to allow cross-examination on matters which would reasonably tend to show bias, interest, or motive to testify falsely. People v. Baptiste (1976), 37 Ill. App.3d 808, 347 N.E.2d 92. Particularly does defendant point to Davis v. Alaska (1974), 415 U.S. 308, 39 L.Ed.2d 347, 94 S.Ct. 1105, where it was held that the refusal to allow a defendant to cross-examine a juvenile witness as to his probationary status denied the accused his sixth amendment right to confront the witnesses against him, notwithstanding a State policy to protect the anonymity of juvenile offenders. It was held that the defendant's right to effective cross-examination of an adverse witness is paramount to a policy protecting the confidentiality of the juvenile record. But such is clearly not the case here since Lake was afforded ample opportunity to thoroughly cross-examine his accomplice, Cronk. Unlike Davis (in which the State's interest shielded the potential bias of a witness), cross-examination was simply curbed and curtailed to prevent disclosure of the sentencing provisions of the offence a recognized practice in jury trials in Illinois. The jury is the trier of fact and has no duty, authority, or responsibility as to the sentence which may, or may not, be imposed. That is within the purview of the presiding judge solely. Not only is a possible penalty immaterial and irrelevant to the jury, but any reference to possible sentence may well prejudice the State's right to a fair trial a right that is equally important to a defendant's right, and a right that is often forgotten or neglected. The decisions cited by the defendant obviously represent the correct law, but they do not divest the trial court of its traditional function of imposing reasonable restraints upon the scope of cross-examination. Unlike the cases relied on by defendant, the trial judge's ruling here did not curtail effective cross-examination of the accomplice witness. Defendant was able to conduct an extensive cross-examination, eliciting from accomplice Cronk all of the salient necessary facts: That he had made "a 432 good deal"; that he was testifying for a reduced charge; that there was a quid pro quo; that he was a co-defendant in this case; that he had been charged with burglary; that he was now charged with theft under $150; that it was a lesser charge; and that there was no agreement as to his sentence on the lesser charge. The only point upon which his cross-examination was limited was to compare or spell out the actual respective sentences. 3 We conclude that the fairness of the trial was clearly not offended by the court's invocation of the policy against disclosing the penalty attached to the offense with which the defendant on trial was charged. In People v. Wilson (1977), 48 Ill. App.3d 885, 363 N.E.2d 374, this court was faced with a somewhat similar situation. The jury in Wilson was advised that an alleged accomplice witness had been granted immunity upon the charge the defendant was being tried on and that the accomplice witness would not have testified for the prosecution without such immunity. The defense attempted to cross-examine the accomplice witness as to the amount of time a parole agent told him he would have to serve on a prior offense once his parole was revoked, but an objection to this question was sustained by the court. The trial court noted that the agent's decision was not binding on the parole board and defense counsel would be permitted to show the witness's motive to testify falsely by probative cross-examination. This court found no abuse of discretion. In this case, as in Wilson, the defense was accorded ample and reasonable opportunity to explore the accomplice witness' possible interest, bias and motive to testify falsely. No error. B People's Instruction No. 11 was given: "To sustain the charge of burglary, the State must prove the following propositions: First: That the defendants knowingly entered a building; and Second: That the defendants did so without authority; and Third: That the defendants did so with intent to commit the crime of theft. If you find from your consideration of all the evidence that these propositions has been proved beyond a reasonable doubt, then you should find the defendants guilty. If, on the other hand, you find from your consideration of all the evidence that each of these propositions has not been proved beyond a reasonable doubt, then you should find the defendants not guilty. I.P.I. Criminal Instruction No. 14.06." There are two errors in that instruction, one of omission and one of substitution. In the approved IPI instruction the second paragraph should *433 read "that each of these propositions has been proved" and in the third paragraph it should read "that any of these propositions has not been proved." From the interlineation one can see what verbiage was omitted from Paragraph 2, and in the case of Paragraph 3 the word "each" was substituted for "any." Although both the defense and the prosecution address the substitution of the third paragraph, we further note the omission from the second paragraph. The defendant argues that People v. Wilson (1976), 43 Ill. App.3d 583, 357 N.E.2d 81, is a case similar to the one at bar. There the trial court failed to read an instruction which had been agreed upon, and the reviewing court held that failure to read an agreed instruction is plain error and may be considered even in the absence of an objection by the defendant. The cases are not similar at all. In Wilson, the trial judge inadvertently failed to charge the jury that it was to consider a prior conviction of the defendant only insofar as the conviction may affect his testimonial credibility. Here, there was no failure to read an instruction, it was only that the instruction was erroneously worded, primarily that the word "each" was substituted for "any." We note here that no objection by defendant to the instruction appears of record, the matter was not preserved in the post-trial motion, and there was no defense argument going to this issue. 4 But even ignoring the doctrine of waiver, we conclude and hold that the obvious typographical omission and/or substitution contained in this instruction are de minimis in nature and when viewed in the context of all 19 proper instructions given, the erroneous interchange of one word did not deprive the defendant of a fair trial. The trial judge included in his instructions to the jury the classic and routine caveat, "You must not single out certain instructions and disregard others." Finally, any error in the giving of instructions is harmless where it is clear that under the evidence the jury's verdict could not have been different. (People v. Farnsley (1973), 53 Ill.2d 537, 293 N.E.2d 600.) And where an improper instruction is given to a jury, reversal is inappropriate unless it can be said that a defendant was so prejudiced by the instruction as to affect the outcome of the verdict. People v. Stewart (1970), 46 Ill.2d 125, 262 N.E.2d 911. As we said at the beginning, the defendant was literally caught redhanded. And in light of the overwhelming evidence of his guilt, as well as the de minimis nature of the claimed instructional error, it seems clear to us that this case must be affirmed. Affirmed. REARDON, P.J., and CRAVEN, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1827246/	43 B.R. 717 (1984) In re DORE & ASSOCIATES CONTRACTING, INC., Debtor. DORE & ASSOCIATES CONTRACTING, INC., Plaintiff, v. AMERICAN DRUGGISTS' INSURANCE COMPANY, et al., Defendants. Bankruptcy No. 81-00695, Adv. No. 82-0207. United States Bankruptcy Court, E.D. Michigan, N.D. November 2, 1984. John J. Hebert, Bay City, Mich., for Dore & Assoc. Randall J. Sandfort, John R. Sosey, Milwaukee, Wis., for Barrett Wrecking. 718 Carl Ricciardi, Wausau, Wis., Kenneth W. Kable, Saginaw, Mich., for City of Wausau. Jimm F. White, Troy, Mich., for American Druggist. MEMORANDUM OPINION ON BARRETT WRECKING'S MOTION TO DISSOLVE THE PRELIMINARY INJUNCTION AGAINST COMMENCING LITIGATION AGAINST AMERICAN DRUGGISTS' INSURANCE COMPANY ARTHUR J. SPECTOR, Bankruptcy Judge. The Debtor is a general contractor. When it filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code on October 27, 1981, it had work in progress for various governmental entities in at least three states. Barrett Wrecking was one of the Debtor's subcontractors on two of its projects in Wisconsin. Barrett claims that the Debtor breached their contracts by failing to pay amounts due it thereunder. As these were public works projects, the Debtor was required by Wisconsin law to procure payment and performance bonds. Wis.Stat.An. § 779.14. American Druggists' Insurance Company supplied these bonds. Barrett has an independent cause of action against American Druggists' on the payment bond if it is eventually determined that the Debtor is in breach. Cf. Riley Constr. Co. v. Schillmoeller & Krofl Co., 70 Wis. 2d 900, 236 N.W.2d 195 (1975); Christenson v. Diversified Builders, Inc., 331 F.2d 992 (10th Cir. 1964), cert. denied, 379 U.S. 843, 85 S. Ct. 82, 13 L. Ed. 2d 48 (1964); Northeast Clackamas County Elec. Co-op v. Continental Cas. Co., 221 F.2d 329 (9th Cir.1955); Fountain Sand & Gravel Co. v. Chilton Constr. Co., 40 Colo. App. 363, 578 P.2d 664 (1978); Morgen & Oswood Constr. Co. v. United States Fidelity & Guar. Co., 167 Mont. 64, 535 P.2d 170 (1975). The Debtor's Second Amended Chapter 11 Plan of Reorganization, which was confirmed on November 10, 1982, contained a unique method of resolving claims. Instead of providing that the Court would decide the validity and extent of all claims against the Debtor, the plan provided that all claims be submitted to a mediation panel set up through the Bay County, Michigan Circuit Court mediation rule.[1] One wise and wary creditor, probably because it was represented by local counsel, objected to this part of the plan, and the Debtor released it from that provision. The others, including Barrett Wrecking, did not object, and so, this Court's predecessor confirmed the plan including that unique provision. Nobody appealed the order confirming the plan. Consequently, the plan and the order confirming it are binding upon creditors as well as the Debtor. 11 U.S.C. § 1141(a); Stoll v. Gottlieb, 305 U.S. 165, 59 S. Ct. 134, 83 L. Ed. 104 (1938); Bizzell v. Hemingway, 548 F.2d 505 (4th Cir.1977); Miller v. Meinard-Commercial Corp., 462 F.2d 358 (5th Cir.1972); In re Silver Mill Frozen Foods, Inc., 32 B.R. 783 (Bankr.W.D.Mich.1983). The mediation procedure established through the state court system is a means to facilitate settlement. No evidence is received and no testimony is heard. The "litigants" merely submit "mediation summaries" outlining in offer of proof style what they expect the evidence to establish and how they believe the law applies thereto. The mediators then separately interview the attorneys as to their "bottom line" positions regarding settlement. See GCR 1963, 316. Armed with only that, the mediators' job is to divine what figure would most likely result in a settlement of the dispute. With this view of its role, a mediation panel would always award some money to the plaintiff. Alternatively, it has 719 been argued that the mediator's role is to guess at what, if any, amount the trier of fact would award the plaintiff after full trial of the case. With this view, it is conceivable that a mediation panel could award zero. When Barrett Wrecking finally became aware of the inherent limitations of the mediation procedure, it objected that it was improper to preclude it from having its day in court on its claim. Whatever the merits of Barrett's argument (and they are considerable),[2] the time to have objected to the procedure was when the plan was proposed for confirmation. Having waited this long, Barrett Wrecking's objection is simply too late. The plan was confirmed, was not appealed, is now res judicata, and is therefore binding on Barrett. Stoll v. Gottlieb, supra. Mediation will determine the extent of Barrett Wrecking's claim against the estate. On September 8, 1982, the Court entered a temporary restraining order prohibiting Barrett Wrecking and numerous other creditors from commencing or continuing any litigation against the Debtor or the Debtor's surety on any payment or performance bonds. On September 30, 1982 the t.r.o. was converted into a preliminary injunctive order to like effect. The surety, American Druggists' Insurance Company, argued in favor of the continuation of the injunction. Barrett Wrecking[3] and other creditors have moved for the dissolution of the order restraining them. Only Barrett's motion is addressed here. Having already held that the determination of Barrett Wrecking's claim is relegated to the mediation process, this question arises: if the mediators decide Barrett's claim is worth less than the amount it seeks, may Barrett sue the surety for an amount in excess of that, or is it estopped by the doctrine of collateral estoppel from seeking more? The parties briefed this issue. Obviously Barrett argued that it is not estopped. The Debtor argued that it is. Interestingly, American Druggists' agreed with Barrett. So does the Court. Collateral estoppel rests on the proposition that a person who has had one full and fair opportunity to litigate an issue is bound by the decision and may not demand a second opportunity as against its former adversary or that party's privy. Spilman v. Harley, 656 F.2d 224 (6th Cir.1981); Overseas Motors, Inc. v. Import Motors Ltd., Inc., 375 F. Supp. 499 (E.D.Mich.1974), aff'd, 519 F.2d 119 (6th Cir.1975), cert. denied, 423 U.S. 987, 96 S. Ct. 395, 46 L. Ed. 2d 304 (1975). A surety is generally considered to be in privity with its principal, and so, if the mediation between Barrett and the debtor is the equivalent of such a "full and fair opportunity to litigate", then the result of that process would probably bind Barrett in any attempted suit against American Druggists'. Riley Constr. Co. v. Schillmoeller & Krofl Co., supra; Monart Motor Co. v. Home Indem. Co., 1 Wis.2d 720 601, 85 N.W.2d 478 (1957). Undoubtedly the claims allowance procedure contained in the Bankruptcy Code provides parties that sort of opportunity. See 11 U.S.C. § 502; Bankruptcy Rules 3007 and 9014. As the description of the mediation process made clear, mediation is not litigation. It lacks the procedural and evidentiary safeguards of litigation. It substitutes in lieu of a judge, a disinterested non-judicial entity whose role is not to find the truth but to guess at what others might think it is. Since the issue will not be "actually litigated" through the proposed process, the result cannot be binding upon Barrett outside of the context of the bankruptcy case. Therefore, Barrett would not be collaterally estopped from re-litigating the amount of its claim as against American Druggists'. Since the mediators will undoubtedly award Barrett something less than it wants, but for the injunctive order prohibiting it Barrett could and would sue American Druggists' for the full amount of its claim less any amount it might already have received directly from the Debtor pursuant to the confirmed plan. Article VII of the Debtor's plan provides: "At the time of filing this Plan, a complaint and temporary restraining order will be filed with the Court restraining all pre-petition claimants from making or proceeding with any claims against American Druggists, the bonding company in this matter. This injunction will be requested under 11 U.S.C. § 105 to facilitate the administration of this estate. At the present time there are numerous claimants who are listed on the Schedules who are also making claims against American Druggists on the bonds of Dore & Associates. Many of these claims are disputed and can be handled more expediently under the provisions of this Plan rather than in two forums. Consequently, to facilitate administration of this case and settle the disputed claims, a temporary restraining order and preliminary injunction will be requested to restrain any further demands from being made on American Druggists or the continuance of any action to collect under the bond of American Druggists in these matters. American Druggists will further be restrained from making any further payments under these bonds." The Debtor argues that the mere confirmation of the plan effected a de facto permanent injunction and therefore it was under no duty to expeditiously proceed to trial of this adversary proceeding. This is incorrect. When the adversary proceeding was filed, a temporary restraining order was issued, which was subsequently converted into a preliminary injunction. Such orders are orders pendente lite. University of Texas v. Camenisch, 451 U.S. 390, 395, 101 S. Ct. 1830, 1834, 68 L. Ed. 2d 175 (1981); Blaylock v. Cheker Oil Co., 547 F.2d 962, 965 (6th Cir.1976). Only after a full trial on the merits can a court convert such interlocutory relief into a permanent injunction. University of Texas v. Camenisch, supra; Diversified Mortg. Investors v. U.S. Life Ins. Co., 544 F.2d 571, 576 (2d Cir.1976); Benson Hotel Corp. v. Woods, 168 F.2d 694, 696-697 (8th Cir.1948); United States v. School Dist. of Omaha, 367 F. Supp. 179 (D.Neb.1973). Trial has not been had nor even scheduled in the two years since the entry of the original stay. During this period the circumstances which arguably supported the original entry of the injunction have evaporated. The principal basis for the injunction was that without such an order the Debtor would have been bound to defend the then numerous lawsuits against its surety and itself filed throughout the nation, which would have so totally occupied the time of its key employees as to have made reorganization impossible. Since then all of the suits and threatened suits but the ones which arise out of the Debtor's contracts in the State of Wisconsin have either been settled or otherwise terminated. Therefore, there no longer exists a reason for enjoining Barrett Wrecking from suing the Debtor's surety on its payment bond. Accordingly, pending trial of this adversary proceeding, the Court will enter an order partially lifting 721 the preliminary injunction for the benefit of Barrett Wrecking only, so that it can commence, if it wishes, a suit against American Druggists' Insurance Company in the forum of its choice. Assuming that Barrett is more successful in a trial against American Druggists' than it is likely to be in the mediation against the Debtor, the insurance company will be required to pay Barrett an amount in excess of Barrett's allowed claim in this bankruptcy case. That situation presents this question: would the surety then have a claim against the Debtor in the bankruptcy case for the excess amount it may have to pay Barrett? The Debtor points to § 502(e) of the Code for the proposition that "the court shall disallow any claim for reimbursement or contribution of any entity that is liable with the debtor on, or has secured, the claim of a creditor, to the extent that(A) such creditor's claim against the estate is disallowed. . . ." The Debtor argues that if Barrett's claim is partially disallowed in the bankruptcy case, then so should the surety's claim for reimbursement for its payment thereof. This would leave the surety "holding the bag". At this juncture, the resolution of this question is premature; furthermore, American Druggists' has not had the opportunity to brief it. Therefore, no opinion as to this issue is given. For the reasons stated above, the Court will (reluctantly) require Barrett Wrecking to submit its claim to mediation for the purpose of allowance against the estate only and will modify the preliminary injunctive order to permit Barrett Wrecking to sue American Druggists' Insurance Company in the forum of its choice. An appropriate order may be submitted. NOTES [1] The third paragraph of Article VI of the confirmed plan stated: "If there are any objections to any claims, those claims shall be submitted to binding mediation, pursuant to the Bay County Rules of Mediation. The mediators to determine these claims shall be chosen from the panel of mediators from the Bay County Bar Association and the determination from that panel will be binding as to the allowability of any disputed claims." [2] Aside from the criticism of the procedure found in the body of the opinion, see infra p. 720, there simply is no statutory or other foundation for mediation substituting for judicial allowance of claims. Section 502(b) requires that "the court, after notice and a hearing, shall determine the amount of . . ." and allow or disallow disputed claims. The mandatory nature of the language indicates that this can only be a judicial function. Heiser v. Woodruff, 327 U.S. 726, 741, n. 1, 66 S. Ct. 853, 860, n. 1, 90 L. Ed. 970 (1946) (Rutledge, J., concurring). The only exception to this requirement is provided in Rule 9019(c) which permits the court to submit a matter to binding arbitration (not mediation), if the parties have so stipulated. This rule is not applicable here because arbitration, which involves the taking of proofs, including the testimony of live witnesses, see, Wright-Bernet, Inc. v. Amalgamated Local Union 41, 501 F. Supp. 72, 74 (S.D.Ohio 1980); Ryan-Walsh Stevedoring, Inc. v. General Longshore Workers Union Local 3000, 509 F. Supp. 463, 467 (E.D.La. 1981); compare GCR 1963, 769.3-.5 (re: arbitration) with GCR 1963, 316.6 (re: mediation), was not what is proposed in the plan. [3] Actually, Barrett filed a motion to dismiss the Debtor's complaint. However, its brief in support of that relief argued that the Court should not enjoin it from suing American Druggists'. Moreover, this motion was heard together with the motions of two other defendants, which, among other things, sought the quashing of the injunction. Finally, at the hearing, Barrett also requested the lifting of the injunction. Fair notice was given the Debtor and its surety of the relief being sought at the consolidated hearings.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2061327/	183 Ill. App. 3d 72 (1989) 538 N.E.2d 1202 THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. ROY PEARSON, Defendant-Appellant. No. 5-87-0624. Illinois Appellate Court Fifth District. Opinion filed May 2, 1989. 73 Daniel M. Kirwan and Janet L. Gandy, both of State Appellate Defender's Office, of Mt. Vernon, for appellant. John Baricevic, State's Attorney, of Belleville (Kenneth R. Boyle and Stephen E. Norris, both of State's Attorneys Appellate Prosecutor's Office, of counsel), for the People. Judgment affirmed. JUSTICE RARICK delivered the opinion of the court: Defendant, Roy Pearson, was charged in the circuit court of St. Clair County with residential burglary. After a trial by jury, Pearson was found guilty and sentenced to five years' probation. On March 17, 1987, Pearson and an accomplice broke into a house owned by Michael Tolden. A neighbor observed the break-in and called police. The police responded. The officers found the lock on the front door broken and, upon searching the premises, discovered Pearson and his accomplice hiding in the basement. A subsequent search of the suspects revealed a crescent wrench and two screwdrivers, one of which had a broken tip. Pearson indicated that he and his accomplice had entered the premises for the purpose of "getting high" on cocaine, although no drugs nor any paraphernalia were found. The premises in question were partially furnished residential rental property. The owner, Michael Tolden, testified that the previous tenant had been evicted the day before the house was burglarized and new tenants were scheduled to move in on March 20, 1987. Tolden also testified that after the previous tenant had been evicted he inspected the premises and put a new lock on the door. After the suspects had been apprehended, Tolden again inspected the premises. He found the frames around the stained glass windows broken, as if someone were trying to remove the glass, and several sections of copper plumbing which had been broken off. At trial, the State submitted a residential burglary instruction which was given over objection, and the defense submitted a criminal trespass instruction which was refused. The State did not submit a burglary instruction, and Pearson specifically instructed his counsel not to submit such an instruction. Pearson was subsequently found guilty of residential burglary and this appeal followed. 1 The sole issue on appeal concerns the statutory definition of 74 a dwelling. Pearson argues that he could not be found guilty of residential burglary because the premises in question were not a dwelling as that term is defined for purposes of the residential burglary statute. Section 19-8 of the Criminal Code of 1961 defines "residential burglary" as knowingly and without authority entering into the dwelling of another with the intent to commit a felony or theft. (Ill. Rev. Stat. 1987, ch. 38, par. 19-3.) Section 2-6(b) of the Code defines "dwelling" as "a house, apartment, mobile home, trailer, or other living quarters in which at the time of the alleged offense the owners or occupants actually reside or in their absence intend within a reasonable period of time to reside." Ill. Rev. Stat. 1987, ch. 38, par. 2-6(b). Pearson maintains that neither the owner nor previous occupant resided there or intended to return and that the new tenants who planned to move in were not returning to reside after an absence and therefore were not occupants within the meaning of the statute. We do not agree with defendant's argument. Defendant places much emphasis on the concept of an absent owner or occupant "returning" to the premises in question, the underlying argument being that the owner/occupant must have previously lived at the premises and subsequently left with the intent to return within a reasonable period of time. This is the premise for Pearson's argument that the new tenants were not covered by the statute. A careful reading of the statute, however, does not support this premise. There is no language in the statute which requires an owner or occupant to have previously resided at the particular premise and be returning after an absence. An identifiable owner or occupant coupled with the requisite intent is all that is required by the statute and those requirements are clearly met in this case. Tolden's testimony that a new tenant was to move in on March 20, 1987, was uncontradicted. We note that the definition of "dwelling" was recently amended for purposes of the residential burglary statute. Under the old definition, a dwelling was "a building, or any portion thereof, a tent, a vehicle, or other enclosed space which is used or intended for use as a human habitation, home, or residence." (Ill. Rev. Stat. 1985, ch. 38, par. 2-6.) The legislative history indicates that the amendment was made because suspects were being prosecuted for residential burglary for breaking into abandoned buildings and unoccupied buildings, such as garages. The legislative history also indicates that the new definition of dwelling was intended to encompass vacation homes and the like, where there are identified owners or occupants who in their absence 75 intend within a reasonable period to come and reside. We do not believe the phrase "in their absence" implies that the owner/occupant must have previously resided there. It is sufficient that an owner or occupant be planning, within a reasonable period of time, to move to the premises and reside there. We hold that vacant residential rental property to which a new tenant is planning within a reasonable period of time to move and establish a residence is a dwelling within the meaning of the statute. The State also argued in its brief that if we determine that the premises were not a dwelling we should reduce the defendant's conviction to burglary under Supreme Court Rule 615(b)(3) (107 Ill.2d R. 615(b)(3)) as his conduct clearly constitutes that offense. Because we have found that Pearson was guilty of residential burglary, we need not address this issue. 2 Finally, the State argues that should Pearson's conviction for residential burglary be upheld, we should remand the cause for resentencing or impose the minimum term of four years in the penitentiary, because the sentence given by the trial court is unauthorized. The State's argument is based on section 5-5-3(c)(2)(G) of the Unified Code of Corrections (Ill. Rev. Stat. 1987, ch. 38, par. 1005-5-3(c)(2)(G)), which prohibits a sentence of probation for residential burglary, and section 5-6-2(b)(1) (Ill. Rev. Stat. 1987, ch. 38, par. 1005-6-2(b)(1)) of the Code, which provides a maximum term of probation of four years for a Class I felony. The State's argument is not relevant, however, as Pearson was placed on probation pursuant to section 23 of the Alcoholism and Substance Abuse Act (Ill. Rev. Stat. 1985, ch. 111 1/2, par. 6323) (repealed by the Illinois Alcoholism and other Drug Dependency Act (Ill. Rev. Stat. 1987, ch. 111 1/2, par. 6351, et seq.)). Probation under the Alcoholism and Substance Abuse Act was an alternative to sentencing under the Unified Code of Corrections of 1963, and the Code's sentencing limitations did not apply. (People v. Cattaneo (1986), 147 Ill. App. 3d 198, 497 N.E.2d 1363; see also People v. Teschner (1980), 81 Ill. 2d 187, 407 N.E.2d 49 (holding that treatment under the Dangerous Drug Abuse Act was an alternative to sentencing under the Unified Code of Corrections).) A term of five years' probation for residential burglary was authorized and proper under the Alcoholism and Substance Abuse Act. We note that while section 21 of the Alcoholism and Substance Abuse Act was amended effective January 1, 1988, to preclude those convicted of residential burglary from being eligible for treatment under the Act (Ill. Rev. Stat. 1987, ch. 111 1/2, par. 6321(g)) (repealed by the Illinois Alcoholism and Other Drug Dependency Act (Ill. Rev. Stat. 76 1987, ch. 111 1/2, par. 6351 et seq.)), such prohibition was not in effect when Pearson was sentenced and did not apply. The judgment of the circuit court of St. Clair County is affirmed. Affirmed. GOLDENHERSH and CHAPMAN, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1750084/	545 So. 2d 1022 (1989) Patrick DARBY v. SAFECO INSURANCE COMPANY OF AMERICA. No. 88-C-3087. Supreme Court of Louisiana. June 19, 1989. 1023 Patrick C. Morrow, for applicant. Larry P. Boudreaux, for defendant. DIXON, Chief Justice.[] The issue in this personal injury case is whether Edwin and Marjorie Darby, parents of plaintiff Patrick Darby, intentionally misrepresented to Lucille Chautin, an agent for defendant Safeco Insurance Company of America, that Patrick was not a member of their household in order to prevent Safeco from canceling their insurance. In the early morning hours of December 3, 1983, twenty year old Patrick Darby was a passenger in Randy Taylor's truck when Taylor lost control. The truck left the road and flipped over, seriously injuring Patrick and killing his cousin Dale Moreau. Darby settled with Randy Taylor's insurer for the liability and medical payments policy limits and then brought this action against Safeco, with whom Patrick's father, Edwin Darby, had an automobile insurance policy that included medical payments and uninsured motorist (UM) coverage. At the time of the accident, Patrick was living at home with his parents. Safeco denied coverage on the basis of an intentionally deceptive material misrepresentation allegedly made by Patrick's parents, Edwin and Marjorie Darby, to its agent, Lucille Chautin, at the time the policy was renewed in May of 1981. Following a three day trial, the jury determined that Patrick Darby was covered by the UM and medical payments clauses in the policy issued to his parents by Safeco because neither parent had deceived Safeco by intentionally misrepresenting that their son Patrick was no longer a member of the household when the policy was renewed. The jury also found that Safeco had acted unreasonably and without probable cause in refusing to tender unconditionally its policy limits and awarded $1000.00 in attorney fees. Darby's total award of $100,000 was reduced by 15% to account for his own negligence. Both parties filed post trial motions. Safeco sought a judgment notwithstanding the verdict, or, alternatively, a new trial. Darby filed for a judgment notwithstanding the verdict on the amount of attorney fees. The trial judge denied Safeco's motions but granted Darby's and increased the attorney fees awarded to $16,750.00. Safeco took a suspensive appeal, which Darby answered. The court of appeal found clear error in the jury's determination that the Darbys had not misrepresented material facts to Safeco with the intent to deceive. The court determined that the Darbys knew that Safeco would not renew their policy as long as Patrick was a member of their household and that they had misrepresented Patrick's residence in order to retain their coverage. Darby v. Safeco Insurance Company of America, 533 So. 2d 37 (La.App. 3rd Cir.1988). Following denial of rehearing, Darby successfully sought writs from this court to review the decision of the court of appeal, contending that the court made factual findings inconsistent with the evidence and misapplied the manifest error standard by substituting its own evaluation of the evidence for that of the jury and the trial judge. Our review of the record in its 1024 entirety supports the jury's determination that Edwin and Marjorie Darby did not intentionally misrepresent to Safeco agent Lucille Chautin that their son Patrick no longer lived with them in order to prevent cancellation of their automobile insurance. Accordingly, we reverse. FACTS In late 1977, Michael Williams, an agent with the Dupre-Carrier-Godchaux Insurance Agency (the Agency) in Opelousas, Louisiana, accepted an application for automobile insurance from Arnaudville residents Edwin and Marjorie Darby. The Darbys were friends of his, and Williams noted in the application he forwarded to Safeco that he knew both had good driving records. Patrick Darby was fourteen at the time and not yet eligible for a driver's license. Patrick turned fifteen in March, 1978, and Edwin Darby added him to the policy the following May. In August, the Darbys increased their liability coverage from the initial 10/20/10 limits for bodily injury and property damage to 100/300.[1] In September, Edwin Darby filled out an information form from Safeco in which he listed himself, his wife, his son Patrick, and his daughter Joan as drivers who were members of the household. The Darbys made several other changes to the policy during the ensuing years, including the removal of Joan as a member of the household and the adding and deleting of coverage for different automobiles. The Agency handled all these changes, initially through agent Michael Williams, and then through his successor, Lucille Chautin. In June 1980, a motorist struck Patrick as he rode his bicycle. The motorist paid for damages to the bicycle. In October 1980, Patrick was blinded by the lights of an oncoming car and swerved into two parked cars as he attempted to avoid a head-on collision. Three months later, in January 1981, Patrick was again involved in an accident when he swerved to avoid a dog and struck a culvert. Both accidents resulted in significant property damages, which Safeco paid. Both accidents also occurred in the early morning hours. Following the October 1980 accident, Safeco sought information from the Agency concerning whether Patrick was usually out during the early morning hours. Safeco had also received information on the June 1980 accident and questioned why Patrick had not reported it. The Agency reassured Safeco that Patrick was normally home by 11:30 p.m. and that Patrick had not intentionally failed to report the June 1980 accident: because he was riding his bicycle, he did not think he had to report it. After the January 1981 accident, however, Safeco decided that it would not renew the Darby's policy because of Patrick's worsening driving record. In February 1981, Safeco underwriter Pat Maher discussed the account with Lucille Chautin and told her that Safeco would renew the policy only if the Agency were to speak to Edwin Darby and Patrick concerning the two accidents and only if Patrick's driving record were to improve. Maher also indicated that Safeco would consider the value of the account to Chautin and to the Agency in deciding whether to renew the policy. In April, Safeco notified the Darbys that their policy would be canceled, effective May 24, 1981, because of Patrick's driving record. Marjorie Darby, who handled the family's insurance matters, called Lucille Chautin when she received the notice of cancellation to ask what she could do to retain the insurance. The testimony of Marjorie Darby and Lucille Chautin conflicts concerning the arrangements that were made in order for the Darbys to keep their insurance with Safeco. Marjorie Darby stated that Lucille Chautin told her that she would "get a paper for her." Mrs. Darby 1025 testified that Lucille Chautin "gave me the understanding that all it [the `paper'] meant was that Patrick couldn't drive our vehicle anymore, so I told her if that was the case that I would take the insurance and that he would not drive our vehicle." Lucille Chautin, however, testified that Marjorie Darby told her that (1) Patrick no longer lived at home; (2) that he lived with his sister Joan; (3) that he had his own car; and (4) that he worked offshore. As evidence, Safeco presented a telephone memorandum dated May 7, 1981, on which Mrs. Chautin had written this information. The ambiguous memorandum also contained the notation "sign not to drive." (See appendix). Lucille Chautin prepared an endorsement that deleted Patrick from the Darby's policy because he was no longer a member of the household. On May 13, 1981, she drove from Opelousas to the Darby's hamburger stand in Arnaudville to get Edwin Darby's signature. Both Edwin and Marjorie Darby testified that Lucille Chautin discussed the endorsement with them at this time and that they understood the endorsement meant that Safeco would renew their insurance if Patrick no longer drove their cars. Edwin Darby signed the endorsement. Lucille Chautin, however, testified that she went over the meaning of the endorsement with the Darbys, that Edwin Darby signed the endorsement in her presence, and that the Darbys knew that Patrick could not be a member of their household if they wanted to retain their insurance coverage with Safeco. When Safeco received the endorsement, Pat Maher telephoned Lucille Chautin on May 22, 1981, to confirm that Patrick was no longer a member of the Darby household. Safeco then decided to renew the Darby's policy. Maher testified that had Safeco known that Patrick was still a member of the household, it would not have renewed the policy. In July 1981, Edwin Darby donated a 1976 truck to his son so that Patrick would have transportation, and Marjorie Darby spoke to Lucille Chautin concerning insurance for Patrick on the truck. Mrs. Chautin secured coverage for Patrick with another insurance company. Patrick listed his address and telephone number on the application as being those of his parents and indicated on the application that he resided at that address during the work week. Mrs. Chautin was aware that the addresses were the same but testified that Mrs. Darby told her to send all notices concerning Patrick's insurance to her, since she handled the insurance for the family. When the post office later changed the Darby's route and box numbers and Marjorie Darby reported the change, the Agency changed the address information in Patrick's file as well. The Agency also obtained insurance for Patrick on a motorcycle that he purchased on August 26, 1983. Again, he listed his address and telephone number as being those of his parents. In March 1983, Edwin Darby filled out a renewal questionnaire from Safeco. In 1978, Darby had listed himself, his wife, his son, and his daughter as licensed drivers residing in the household; this time he listed only himself and his wife. Although his daughter was no longer a member of the household at this time, Patrick was. On December 3, 1983, Patrick Darby was seriously injured when the truck in which he was riding left the road and overturned. Safeco denied medical payments coverage and UM coverage based on the Darbys' allegedly intentional, deceptive misrepresentation that Patrick was not a member of their household when the insurance was renewed in 1981 and their subsequent failure to inform Safeco that Patrick lived with them. MATERIAL MISREPRESENTATION WITH INTENT TO DECEIVE Under the terms of R.S. 22:619A, which sets forth the conditions under which an insurer can avoid a liability insurance contract, an oral or written misrepresentation or warranty made by or on behalf of an insured in negotiating an insurance contract cannot be deemed material or void the contract unless made with the intent to deceive. Accordingly, there must be a finding of intent to deceive on the part of 1026 the insured in order to defeat coverage.[2]Cousin v. Page, 372 So. 2d 1231, 1233 (La. 1979); DiGerolamo v. Liberty Mutual Insurance Co., 364 So. 2d 939, 941 (La.1978). The insurer claiming the defense of material misrepresentation in order to avoid coverage bears the burden of proving that the insured misrepresented a material fact and did so with the intent to deceive. Cousin v. Page, supra at 1233. Because of the difficulties inherent in proving that a person acted with the intent to deceive, the courts have lightened somewhat the insurer's burden by considering the surrounding circumstances in determining whether the insured knew that representations made to the insurer were false: "Intent to deceive must be determined from surrounding circumstances indicating the insured's knowledge of the falsity of the representations made in the application and his recognition of the materiality of his misrepresentations, or from circumstances which create a reasonable assumption that the insured recognized the materiality." Id. It is undisputed in this case that Patrick lived at home with his parents during the time period in question, and the evidence clearly shows that Safeco would not have renewed the Darby's policy had it known that Patrick remained a member of the Darby household. Thus, the issues are whether the Darbys made a material misrepresentation concerning Patrick's residence and, if so, whether they made it with the intent to deceive Safeco. In its answer to interrogatory number 2, the jury found that neither Edwin nor Marjorie Darby intentionally misrepresented to Safeco or its agent Lucille Chautin that Patrick Darby no longer lived with them. In reversing this finding, the court of appeal focused on Edwin Darby's failure to list Patrick as a member of his household when he completed a 1983 renewal questionnaire sent to him by Safeco. Since Darby had listed both Patrick and his daughter Joan on the 1978 renewal questionnaire, the court of appeal determined that the Darbys' intent in answering the questionnaire had changed because "they were well aware of the fact that SAFECO would cancel their insurance if it were known that Patrick was still living at home, regardless of whether or not he drove the insured vehicles." Darby v. Safeco, supra at 41. The question now before this court is whether the court of appeal erred in reversing the factual finding of the jury. An appellate court should not disturb reasonable evaluations of credibility and reasonable inferences of fact made by a jury when the record as a whole reveals a reasonable basis for the finding in the trial court. See Virgil v. American Guaranty and Liability Insurance Co., 507 So. 2d 825, 826 (La.1987) (Dennis, J. concurring); Arceneaux v. Domingue, 365 So. 2d 1330, 1333 (La.1978). A review of this record discloses that the court of appeal erred in reversing the jury's finding that the Darbys did not intentionally misrepresent to Lucille Chautin that their son no longer lived at home in order to secure the renewal of their insurance with Safeco. The record in its entirety supports instead the jury's reasonable conclusion that the Darbys believed that Safeco would renew their 1027 insurance so long as Patrick did not drive their cars. The record does contain conflicting evidence concerning what Lucille Chautin and Marjorie Darby discussed during the May 1981 telephone call. Chautin testified that Marjorie Darby told her that Patrick no longer lived at home. However, numerous witnesses, including Patrick and his sister Joan, with whom he sometimes spent the night, testified that he had always lived at home with his parents. Employment records from Tidewater Marine showed that Patrick did not begin to work offshore until February 1982. Patrick's 1981 tax return was consistent with testimony that he worked short periods for two construction companies during 1981. Also consistent with the plaintiff's position was testimony that Patrick, who was scheduled to graduate in May 1981, attended the final weeks of class during that spring term. Safeco contends that the testimony of Marjorie Darby that she did not represent to Lucille Chautin that her son no longer lived at home is self-serving when compared with the contemporaneous telephone notation Lucille Chautin made of the conversation. The uncontradicted testimony of several witnesses that Patrick had always lived at home and did not own a car or work offshore until late 1981 or early 1982 undercuts the persuasiveness of that telephone notation and supports Marjorie Darby's account of the conversation. The ambiguous memorandum also includes the notation "sign not to drive," a notation that could also be seen as supporting Mrs. Darby's position. Thus, whether Marjorie Darby told Lucille Chautin in May of 1981 that Patrick was working offshore and no longer living at home involves an evaluation by the jury of the credibility of both witnesses. In the face of conflicting testimony, "[t]his court accords great weight to the factual findings of the trier of fact ... and generally will not disturb reasonable evaluations of credibility and reasonable inferences of fact...." Chapman v. Belden Corp., 428 So. 2d 396, 399 (La.1983). The jury was not clearly wrong in believing Mrs. Darby and in determining that the Darbys had made no misrepresentation. The Darbys have contended throughout this litigation that their understanding was that Patrick could not drive their cars in order for them to retain their Safeco coverage. The transfer of the truck to Patrick by his father in July 1981 is consistent with this position. So too is the listing of Edwin and Marjorie Darby's address and telephone number on Patrick's subsequent insurance applications with the Agency. Thus, the Agency knew that the address of Patrick and his parents was the same. Under the well-settled terms of agency law, this knowledge is imputed to Safeco. Safeco's contention that the same address and telephone number listed on both policies was the result of Marjorie Darby's handling of Patrick's insurance business is insufficient to negate the other evidence presented. Although Edwin Darby did sign an endorsement deleting Patrick from coverage under the policy because he no longer lived at home, it is significant that Lucille Chautin retained the insured's copy in the Agency's file. The Darbys thus had nothing in writing to indicate to them that their understanding that Patrick was not to drive the cars was incorrect. Indeed, the notice of nonrenewal sent to the Darbys by Safeco, dated April 15, 1981, specifies that the decision not to renew their insurance is "due to Patrick's accidents on October 11, 1980 and January 5, 1981 (where speed was a contributing factor)." Lucille Chautin admitted the Agency's file contained no documents stating that Safeco would not renew the Darbys' policy if Patrick were a member of the household, even though both Safeco and the Agency required documentation of such critical information. Since the record as a whole does not establish that the Darbys made any misrepresentations with the intent to deceive, such an intent cannot be inferred from individual items in the record. Consequently, the jury could have reasonably believed that Edwin Darby omitted Patrick's name from the 1983 renewal questionnaire because Patrick was no longer allowed to drive the cars covered by the policy, and not because Edwin Darby intended to deceive Safeco 1028 concerning his son's residence in order to renew the insurance. PENALTIES AND ATTORNEY FEES In its answer to interrogatory number two, the jury found that Safeco was unreasonable or acted without probable cause in refusing to tender unconditionally a reasonable amount to Patrick Darby and awarded plaintiff attorney fees of $1000.00. The trial judge later granted the plaintiff's motion for additur and raised the amount to $16,750.00. In reversing the judgment of the trial court in favor of the plaintiff, the court of appeal also reversed without discussion the finding that Safeco had acted unreasonably or without probable cause. In his appeal to this court, plaintiff now seeks the reinstatement of the trial court's award of attorney fees, as well as an award for additional fees incurred in the appellate process. The record demonstrates, however, that Safeco had legitimate doubts about the validity of its coverage of Patrick Darby. Accordingly, the court of appeal properly reversed the jury's award of attorney fees based on its finding that Safeco had acted unreasonably or without probable cause in refusing to tender medical payments and UM coverage. It is important to view Safeco's behavior in refusing to tender its policy limits both in terms of the extent of its UM obligation and in terms of whether any coverage existed. Edwin and Marjorie Darby had originally contracted in 1977 for 10/20 liability coverage and 10/20 UM coverage. When the Darbys raised their liability coverage to 100/300, the declarations page of their policy continued to list 10/20 UM limits. After Safeco began its investigation of Patrick's December 1983 accident, documents in Safeco's internal file indicate that an adjuster, Earl Stigler, raised questions on April 5, 1984, concerning whether the 10/20 limits remained applicable. Stigler speculated on the extent of Safeco's UM obligation because the Agency did not have on file an election by Edwin Darby of limits lower than the 100/300 liability limits. Stigler also questioned whether the Darbys' addition and deletion of vehicles over the years had affected the UM coverage and wondered if Safeco could "still get away with the 10/20 limits?" Later Stigler theorized that Safeco should argue the 10/20 UM limits initially, "since this is our weakest defense," and then "go after Patrick'[s] not being an insured." Almost one year later, a memorandum from decision analyst Ronnie Black of Safeco's Dallas office questioned whether the Darbys' May 24, 1978 application and the August 8, 1978 endorsement raising the liability limits but leaving the UM coverage at 10/20 were sufficient under the law to constitute a proper rejection of the higher UM limits. Black attached cases received from Safeco's attorney discussing effective UM waivers and speculated that, based on his experience, Safeco had a 50/50 chance of prevailing on this issue in court. The memorandum suggested the need to depose the Darbys to document their testimony concerning the selection of UM limits prior to making any decision concerning the success of a motion for summary judgment on the issue. Black also noted that under the policy language, he believed that Patrick Darby would be covered as an omnibus insured, except for the question of whether the policy was void from the beginning because of the misstatements concerning Patrick's residence. Finally, Black also wondered whether Safeco had complied with the provisions of R.S. 22:658, the statute allowing assessment of attorney fees and penalties against the insurer if it arbitrarily, capriciously, or without probable cause fails to tender a reasonable amount within sixty days of demand. The memorandum concluded that "[i]t will be our argument that we're not in violation due to the questions of coverage, liability and damage that continue to confront us." Mike Glasscock, Safeco's casualty claims supervisor for the State of Louisiana, testified that the extent of Safeco's UM exposure had been an issue from the beginning. Under cross-examination, however, Glasscock admitted that Safeco's file on the Darbys did not contain documentation showing that the Darbys had rejected UM coverage equal to the liability coverage 1029 when they raised their liability coverage from 10/20 to 100/300 in August 1978. Glasscock also testified that Safeco increased the loss reserve in March 1985 after he received Ronnie Black's memo suggesting that Patrick Darby was an omnibus insured under his father's policy, unless the Darbys had intentionally deceived the company concerning his residence, and speculating that Safeco had a 50/50 chance of having a court declare the UM limits were 100/300 rather than 10/20. Glasscock's testimony, when coupled with the documents from Safeco's file on the Darbys, strongly suggests that Safeco knew in 1985 that its exposure under the UM coverage would be equal to the Darbys' 100/300 liability limits. The extent of the UM exposure, however, was not the only question with which Safeco was confronted. Had it been, the record would support the jury's finding that Safeco acted unreasonably and without probable cause in refusing to tender its limits. Safeco's principal question, however, concerned whether the policy afforded any coverage to the Darbys. Safeco had in its file a memorandum confirming a telephone conversation with Lucille Chautin in which she reported that Marjorie Darby told her that Patrick no longer lived at home. Safeco also had Edwin Darby's signature on an endorsement deleting coverage for Patrick because he no longer lived at home. The company knew through discovery that Patrick had never moved from the Darby household and that he had obtained insurance from a different company for the truck his father donated to him. Based on this information, Safeco's refusal to tender policy limits pending a legal decision on the question of whether an intentional misrepresentation had been made was not unreasonable or without probable cause. The jury's finding to the contrary was clearly wrong. DECREE Accordingly, the decision of the court of appeal that Marjorie and Edwin Darby made an intentional misrepresentation to Safeco is reversed. The decision of the court of appeal reversing the trial court's award of penalties and attorney fees is affirmed; the judgment of the district court is amended, and, as amended is affirmed at defendant's cost. WATSON, J., concurs in part and dissents in part, assigning reasons. COLE, J., dissents from that part of the majority opinion reversing the court of appeal and otherwise concurs. 1030 1031 WATSON, Justice, concurring in part and dissenting in part: I concur in the holding that plaintiff is entitled to recover under his parents' underinsured motorist coverage. Safeco intended to delete Patrick as an omnibus insured because his accident record made him a poor liability risk. Since Patrick was injured as a guest passenger, his driving record was not material to Safeco's exposure. I dissent from the failure to award penalties and attorney's fees, because the jury made a factual determination that the insurer was arbitrary and capricious in not paying the claim. NOTES [*] PIKE HALL, Jr., Associate Justice Ad Hoc, sitting for Associate Justice HARRY T. LEMMON. [1] The Darbys originally had 10/20 uninsured motorist coverage. When they raised their liability limits, Safeco continued to charge them for 10/20 UM limits. The Agency, however, did not secure from the Darbys a proper written rejection of UM coverage equal to the liability coverage as required by law. As a result, the trial court determined that Safeco had exposure under the UM coverage equal to the increased liability limits. This issue is not disputed on appeal. [2] Safeco contends that the jury did not comprehend that the UM and medical payments provisions the Darbys enjoyed under their family automobile insurance policy covered relatives living in their household as well. Safeco's renewal of the Darbys' policy did indeed increase Safeco's risk exposure because of Patrick's residence. The Darbys received the benefit of lower rates as well because Safeco thought it was no longer insuring a household in which a young driver resided. R.S. 22:619(B), which was discussed in the court of appeal opinion and briefly in the arguments of the parties, allows an insurer to avoid coverage if the applicant for life or health and accident insurance made a false statement with actual intent to deceive and that statement materially affected the acceptance of the risk or the hazard assumed by the insurer. See Gay v. United Benefit Life Insurance Co., 233 La. 226, 96 So. 2d 497 (1957). The statute, by its own terms, is inapplicable to liability policies. Accordingly, any arguments concerning Safeco's increased risk are irrelevant except in determining whether the alleged misrepresentation was material. Safeco can avoid the medical payments and UM coverage due to Patrick under the Darbys' policy only by proving that a material misrepresentation was made and that it was made with the intent to deceive.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1776333/	601 So. 2d 56 (1992) Ex parte Robert THOMAS. (Re Robert Thomas v. State). 1910303. Supreme Court of Alabama. May 15, 1992. J. Patrick Cheshire, Selma, for appellant. James H. Evans, Atty. Gen., and David B. Karn, Asst. Atty. Gen., for appellee. INGRAM, Justice. A jury convicted Robert Thomas of murder, based on evidence that he stabbed Gleonard G. Holt to death outside a Selma lounge. Thomas was sentenced to a term of 30 years in the state penitentiary for the murder conviction. Thomas appealed to the Court of Criminal Appeals, which affirmed his conviction with an unpublished memorandum, 587 So. 2d 1118. This Court granted Thomas' petition for the writ of certiorari to examine the issue whether the trial court, at a hearing on Thomas's motion challenging the State's use of its peremptory challenges as being racially discriminatory, see Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 57 (1986), erred in refusing to require the State to produce a document that it used in exercising its peremptory challenges. The document at issue contained the misdemeanor criminal histories and driving records of the veniremembers. Thomas alleged in his Batson motion that of the 11 peremptory challenges exercised by the State, 8 were used against blacks. At a hearing on Thomas's motion, the State, in giving its reasons for exercising its peremptory challenges, indicated that the eight black veniremembers were struck because they had a large number of misdemeanor convictions and/or bad driving records. The State indicated that one of its investigators had prepared a document detailing the misdemeanor convictions and driving records of all of the veniremembers and that it relied on this list in exercising peremptory challenges. Indeed, the record indicates that while some of the explanations given by the State for exercising its peremptory challenges against five of the eight black veniremembers who were struck are reflected in the veniremembers' actions or voir dire testimony, the explanations given for the State's other three strikes related only to the misdemeanor criminal histories and/or driving records of the black veniremembers. In giving its explanations for striking these veniremembers, the State said: "I struck [veniremember number 36] because he has 16 misdemeanor charges and 20 traffic tickets and two accidents. I thought he had little regard for the law. One of those being an assault on a police officer. "... I struck [veniremember number 20] because she has a misdemeanor, theft of property, third degree conviction and three traffic tickets. I felt like she would not be a good State's juror. "... I struck [veniremember number 3] because he has between his traffic tickets and his accidents, he's got 17 [sic]. I show he has 8 accidents and 11 traffic tickets. I felt like he had little regard for the law. For that reason I struck him." After the State finished giving its reasons for the use of its peremptory challenges, Thomas' counsel asked the State if any of the white veniremembers who were not struck by the State had misdemeanor criminal histories and/or driving records worse than the eight black veniremembers who were struck by the State. Thereafter, the following colloquy took place: "[The State]: I can't say worse. `Worse' is a hard word to define. I struck everyone that had misdemeanor convictions. Now when you get down to traffic, there are a number of people on this jury that may have traffic convictions and/or accidents. However, I struck those that had the largest number. "[Thomas's counsel]: Now I see you have a list there before you. "[The State]: Yes. "[Thomas's counsel]: Judge, I would askIs that the list you struck from? In determining the number of citations, etc., is this the list you struck from? "[The State]: Well, I used that in conjunctionI used their testimony during voir dire and their answers to your questions on voir dire also. "[Thomas's counsel]: I move that this sheet used by the district attorney be introduced into evidence at this time or a copy thereof for the Court's viewing and also for purposes of a record, if necessary, showing the number of misdemeanor charges, traffic charges for each and every member of the venire." The State objected to the request that it be required to produce the document containing the misdemeanor criminal histories and driving records of the veniremembers. The trial court sustained the prosecutor's objection and overruled Thomas's Batson motion. In a recent case, Ex parte Bird, 594 So. 2d 676 (Ala.1991), we underscored the policies of Ex parte Jackson, 516 So. 2d 768 (Ala.1986), and Ex parte Branch, 526 So. 2d 609 (Ala.1987), which are our fundamental cases interpreting the United States Supreme Court's holding in Batson v. Kentucky, supra. In Bird, we noted that the burden of persuasion is initially on the party 58 alleging discriminatory use of peremptory challenges to establish a prima facie case of discrimination. 594 So.2d at 679 (quoting Ex parte Branch, 526 So.2d at 622). After a prima facie case has been established, there is a presumption that the peremptory challenges were used to discriminate against black jurors. Id. (quoting Ex parte Branch, 526 So.2d at 623). The State then has the burden of articulating a clear, specific, and legitimate reason for the challenge that relates to the particular case to be tried and that is nondiscriminatory. Id. Once the State has articulated a nondiscriminatory reason for challenging the black jurors, the defendant can offer evidence showing that the reasons or explanations are merely a sham or pretext. Ex parte Branch, 526 So.2d at 624. Furthermore, in evaluating the evidence and explanations presented by the State for the use of its peremptory challenges, the trial court must determine whether the explanations are sufficient to overcome the presumption of bias. Id. The trial court cannot merely accept the specific reasons given by the prosecutor at face value. Id. Rather, the court must consider whether the facially neutral explanations are contrived to avoid admitting acts of group discrimination. Id. In the present case, neither party disputes that Thomas made a prima facie showing of discrimination by the State or that the State articulated ostensibly facially neutral explanations for its peremptory challenges. The focus of our inquiry, therefore, is on whether the trial court, in refusing to require the State to produce the document containing the misdemeanor criminal histories and driving records of the veniremembers, erroneously denied Thomas an opportunity to prove that the seemingly facially neutral explanations offered by the State were a sham or pretext. In Branch, this Court gave several examples of the types of evidence that can be used to show sham or pretext. Perhaps the most compelling of these examples is precisely what Thomas says he was attempting to show in the present case, i.e., that "persons with the same or similar characteristics as the challenged juror[s] were not struck." Id. The record in this case reveals that when Thomas's counsel questioned the State as to whether any of the white veniremembers who were ultimately seated on the jury had worse misdemeanor criminal histories and/or worse driving records than the black veniremembers who were struck, the State, at first, evaded the question by saying that "`[w]orse' is a hard word to define." The State went on to answer the question by saying that it "struck everyone that had misdemeanor convictions" and that it "struck those that had the largest number" of traffic convictions and/or accidents. However, when Thomas' counsel attempted to have the document listing the misdemeanor convictions and driving records of the veniremembers entered into evidence, the State objected. In response to this objection, the trial court denied the request of Thomas's counsel, thereby accepting at face value the State's assertion that no white veniremembers seated on the jury had worse misdemeanor criminal histories and/or driving records than the black veniremembers who were struck. This the trial court could not do, given our holdings interpreting Batson. See, e.g., Ex parte Bird, supra; Ex parte Branch, supra; Ex parte Jackson, supra. We do not wish to be understood as holding that the trial court erred in this case by refusing to require the State to place into evidence the document that it used in exercising its peremptory challenges; neither do we intend this case to stand for the proposition that the State is now required to produce all notes, reports, or other documents that it uses in exercising its peremptory challenges. Extremely significant in this case, and at the heart of the reason this case must be reversed, is the trial court's accepting at face value the State's ostensibly facially neutral explanations for the use of its peremptory challenges, which were, with regard to three of the black veniremembers who were struck, based exclusively on information contained in the document to which only the State had access. If there was in this case voir *59 dire testimony substantiating the State's explanations for the use of its peremptory challenges, e.g., if the State had engaged the veniremembers in voir dire questions concerning the veniremembers' misdemeanor criminal histories and/or their driving records, or if the trial court had ordered the State to produce the document that it used in exercising its peremptory challenges, or if the trial court had examined the document in camera, we might be in a position to affirm, rather than being compelled, as we are, to reverse and remand. The judgment of the Court of Criminal Appeals is reversed and the cause is remanded for further proceedings consistent with this opinion. REVERSED AND REMANDED. HORNSBY, C.J., and MADDOX, ALMON, SHORES, ADAMS and KENNEDY, JJ., concur. HOUSTON, J., dissents. HOUSTON, Justice (dissenting). A black defendant was charged with the murder of a black victim at a lounge in Selma, Alabama. The jury, whose unanimous verdict found the defendant guilty, was composed of seven black jurors and five white jurors. The state used three of its peremptory challenges to strike white veniremen. Where is the prima facie case of discrimination on the part of the state? I do not see it. Therefore, I am "compelled" to vote to affirm the judgment of the Court of Criminal Appeals and that of the trial court. The peremptory challenge is party neutral. It does not favor the state or the defendant in a criminal case. It does not favor a plaintiff or a defendant in a civil action. Although I fear that I am an eyewitness to it, I refuse to participate in the demise of the peremptory challenge. See Ex parte Branch, 526 So. 2d 609, 632-34 (Ala.1987) (Houston, J., dissenting); see, also, Guthrie v. State, 598 So. 2d 1020 (Ala. 1992) (Houston, J., dissenting); Ex parte Adkins, 600 So. 2d 1067 (Ala.1992) (Houston, J., concurring in the result). I concluded my dissent in Thomas v. Diversified Contractors, Inc., 551 So. 2d 343, 349-53 (Ala.1989), with this paragraph: "I respectfully dissent, because the decision today will impair severely the utility of a procedural device whose underlying justificationthe community's and the litigants' acceptance of a jury as `a good and proper mode of deciding matters'is, in my opinion, desperately needed today."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1791701/	904 So. 2d 928 (2005) Joseph MATT, et al. v. AGRO DISTRIBUTION, LLC, et al. No. 05-291. Court of Appeal of Louisiana, Third Circuit. June 1, 2005. 930 Thomas G. Zentner, Jr., Nelson, Zentner, Sartor & Snellings, Monroe, LA, for Defendants/Appellants, Land O'Lakes, Inc., Agro Distribution, LLC, Agrilliance, LLC. Edwin Dunahoe, Dunahoe Law Firm, Natchitoches, LA, for Plaintiffs/Appellees, Joseph Matt, April Matt, Debbie Howell, Lake Chicot Partnership. Court composed of JOHN D. SAUNDERS, OSWALD A. DECUIR, and MARC T. AMY, Judges. AMY, Judge. The plaintiffs sought damages related to what they allege was a deficient yield in their corn crop. A jury found in favor of the plaintiffs, awarding damages related to lost production, as well as damages for the plaintiffs' mental anguish and distress. The jury also awarded damages based upon the reconventional demand relating to repayment of an outstanding debt. The defendants appeal. The plaintiffs have answered the appeal, seeking among other things, attorney's fees for work performed on appeal. For the following reasons, we affirm the judgment of the trial court and award additional attorney's fees for work performed on appeal. Factual and Procedural Background This consolidated matter relates to two individual claims for low corn crop yield.[1]931 Joseph Matt is the plaintiff in the first matter, along with his wife April Matt, his mother-in-law Debbie Howell, and their partnership, Lake Chicot Partnership (hereinafter referred to collectively as Joseph Matt). Joseph's brother, Derritt Matt, Jr. and his wife, Roxanne Matt (hereinafter Derritt Matt) are the plaintiffs in the consolidated matter. Both plaintiffs are farmers. Trial testimony indicated that the plaintiffs were satisfied with their corn yield in 2001. According to the plaintiffs, they intended to order the same type of seed for their 2002 crop. Derritt and Joseph individually contacted Victor Cox, a salesman with Agro Distribution, LLC (Agro), and asked for the same type of corn seed they planted in 2001, a 115-118 day maturity seed. Mr. Cox confirmed these conversations and testified that he contacted Thomas Poole, then a Location Manager and Salesman for Agro, to "book" the corn seed for the plaintiffs. After an initial order was delivered to the plaintifffs, Mr. Cox contacted them and informed them not to plant the seed. According to Mr. Cox, he was told that the seed delivered was not actually 115-118 day corn seed. This initial delivery was picked up and replaced with another variety. Along with another variety of 115-118 day corn seed, the plaintiffs planted the new delivery of seed on their respective fields. Both plaintiffs testified that the corn initially grew as expected, but that it began to "tassel" in approximately fifty days. According to Mr. Cox, 115-118 day corn will usually tassel in seventy-five to eighty days and that after corn tassels, it begins to make an ear, "fill out the ear," and pollinate. Steven Schutz, an agricultural consultant qualified as an expert, testified that the later tasseling date of 115 day corn allowed time for the ears to more fully develop. He explained that the early tasseling date of the seed planted indicated that it had a 90-95 day maturity rate and would not be recommended for the area. When informed of the early tasseling by the plaintiffs and another grower, Mr. Cox contacted Mr. Poole who, in turn, contacted Ed Boykin, a Cropland Genetics representative.[2] According to Mr. Cox, Mr. Boykin acknowledged the problem with the corn and instructed that the plaintiffs should take the corn to harvest. Given these instructions, the plaintiffs raised the corn to term and harvested it, as they did the remainder of the crop. The remaining portion of the crop, raised from different seed, did not prematurely tassel. The plaintiffs reported a reduced per acre yield from the year before. Although the plaintiffs were able to pay off the bulk of their outstanding debt related to the 2002 year, they were each unable to extinguish their debt to Agro. The plaintiffs filed their respective petitions in this matter, seeking damages related to the reduced yields. Agro Distribution, LLC, Agriliance, LLC, and Land O' Lakes, Inc. were named as defendants. A cross-claim was filed against the plaintiffs, seeking outstanding balances on the products purchased from the defendants. A jury found in favor of the plaintiffs, concluding that the "corn seed failed to possess a quality which it was represented by defendants to plaintiffs to possess[]" and that damages resulted from this failure. The jury awarded damages as follows to Derritt and Roxanne Matt: 1) Cost of corn seed, $2,847.50; 2) Lost corn crop production, $81,000.00; 3) Inability to secure 932 a crop loan for the 2003 crop year, $30,000.00; 4) Mental anguish, anxiety and distress, individual awards of $25,000.00 each to Derritt and Roxanne; and 5) Attorney's fees, $55,000.00. The jury awarded damages as follows to Joseph Matt, April Matt, Debbie Howell, and Lake Chicot Partnership: 1) Cost of corn seed, $3,685.00; 2) Lost corn crop production, $123,000.00; 3) Inability to secure a crop loan for the 2003 crop year, $45,000.00; 4) Mental anguish, anxiety and distress, individual awards of $25,000.00 each to Joseph Matt, April Matt, and Debbie Howell; and 5) Attorney's fees, $71,000.00. The jury also found in favor of Agro Distribution, LLC in its reconventional demand against the plaintiffs. The jury awarded Agro $35,500.00 in its claim against Derritt and Roxanne Matt and $85,500.00 in its claim against Lake Chicot Partnership. The trial court separately ruled on the interest due on the reconventional demand, finding that the legal interest rate of twelve percent was applicable rather than the eighteen percent sought by the defendants. Subsequent to this ruling, the defendants filed an exception of no cause of action, asserting that the plaintiffs had no cause of action for the nonpecuniary awards made by the jury. The trial court denied the exception, finding it untimely. Finally, the trial court denied the defendants' motions for new trial, judgment notwithstanding the verdict, and remittitur. The defendants appeal and present the following assignments of error: 1. The jury in this matter erred in awarding damages to plaintiffs. Alternatively, the jury award was excessive. 2. The jury erred in its failure to award full damages to defendants/plaintiffs-in-reconvention. 3. The Trial Court erred in awarding only the twelve (12%) per cent conventional rate of interest as opposed to a percentage rate of eighteen (18%) percent as stated in the contract between the parties. 4. The Trial Court erred in denying Appellants' Exception of No Cause of Action. 5. The Trial Court erred in its denial of the Motion for New Trial, Judgment Notwithstanding the Verdict and Motion for Remittitur on behalf of defendants/appellants. 6. The jury erred in awarding damages for plaintiffs' inability to secure crop loans for the 2003 farm year. The plaintiffs answered the appeal, questioning the trial court's exclusion of evidence regarding expenses incurred in the cultivation of the corn and the jury's determination that the defendants established the claim in reconvention with sufficient proof. Finally, the plaintiffs seek an increase in attorney's fees for work performed on appeal. Discussion Damages for Lost Crop Production The defendants first question the awards to the plaintiffs for lost corn crop production. They assert that "[t]he clear error for this award lies in the fact that plaintiffs failed to illustrate the exact production for the alleged defective corn seed variety." In particular, the defendants point to Derritt's statement that he harvested the allegedly defective corn separately from that which grew from other seed and as expected, but that the two corn types were not stored or sold separately. The defendants assert that: "At the time that this decision was made by plaintiffs, they knew they had a problem with their yield, knew they were going to pursue a claim, and yet, chose not to separate 933 the yields in order to prove their claim." First, the record supports a determination that the corn seed was defective insofar as the plaintiffs expected 115-118 day seed and the seed delivered tasseled prematurely. Rather, this assignment addresses the method used by the plaintiffs to establish that lost yield. The jury's determination as to the evidence presented with regard to the appropriate measure is factual in nature. A jury's factual determinations are subject to the manifest error standard of review and will not be reversed unless clearly wrong. See Guillory v. Ins. Co. of North America, 96-1084 (La.4/8/97), 692 So. 2d 1029. Our review reveals no manifest error in the jury's determination that the plaintiffs sufficiently quantified that loss so as to prove damages. Both plaintiffs testified as to their harvesting methods and explained that it was not their practice to separate the harvests of the individual varieties planted. Both Derritt and Joseph denied that they were told by the defendants to separate the allegedly defective corn seed from the other varieties. Derritt stated that doing so was not a standard farming practice. Rather, Derritt and Joseph testified that they were told to merely collect their three-year average yield. Mr. Cox confirmed this request. The record indicates that both Derritt and Joseph's three-year average yield was 130 bushels of corn per acre. Derritt's 2002 average yield was 71 bushels per acre, whereas Joseph's 2002 average yield was 68 bushels per acre. The jury was free to conclude that this reduced yield was due to the defective seed as the remaining harvest was from 115-118 day seed which was the same as had been planted the year before and which developed as expected. Insofar as the defendants assert that plaintiffs were aware of the controversy and that they failed to separate the corn to preserve their evidence, two facts bear mentioning. First, the plaintiffs testified that they did as instructed by Agro personnel and that they were told they would "settle up" at the end of the year. Further, had the plaintiffs separated the corn before it was sold, the three year average would have been unhelpful as an average to measurement since the three year harvest was also based on the sale of a harvest of more than one variety. There would have been no measure of how this particular seed had performed in years past. As the record supports the jury's decision, this assignment lacks merit. Failure to Secure Crop Loans The defendants next question the award made for the plaintiffs' inability to obtain crop loans for the 2003 crop. The defendants contend that although the outstanding debt owed Agro by each of the plaintiffs was provided as a basis for the refusal of the crop loan, the Agro loan was a relatively small percentage of their overall indebtedness. Although the record indicates that the plaintiffs each had outstanding debt, the record supports a determination that it was the outstanding Agro debt that was responsible for the bank's refusal to extend the 2003 loan. Layne Parnell, the plaintiffs' banker since 1998, testified that his responsibilities at Ouachita Independent Bank involved agricultural loans. He stated that the bank could not extend 2003 loans to the plaintiffs until they resolved the Agro matter. Furthermore, a letter addressed to Lake Chicot Partnership and authored by Mr. Parnell, states that: "In order to proceed with the approval process of your 2003 farm-operating loan, the disputed debt that you have with 934 AGRO must be resolved. OIB or FSA cannot give you final approval until such time as it is resolved. If this is not resolved then OIB will be unable to provide financing for you in 2003." Finally, Mr. Layne testified as to both plaintiffs' financial situations, including their assets and their liabilities, and confirmed that, absent the "problem with Agro," he would have been able to get each plaintiff approved for the loan. Given Mr. Layne's testimony regarding the importance of the Agro debt in the denial of the loan, the jury's determination is not manifestly erroneous. This assignment lacks merit. General Damages The defendants next question the fact that general damages were awarded and that they were awarded not only to Joseph and Derritt Matt, but to Roxanne Matt, April Matt, and Debbie Howell as well. The defendants contend that since Joseph and Derritt were the only plaintiffs who "actually farmed the acreage in 2002," they should be the only plaintiffs awarded general damages. The defendants stated that "farming, like many other endeavors, is a risky venture, and no doubt, farmers across our state are filled with worry and anxiety each season. Therefore, 2002 was no different for the Matts other than the fact that they did indeed sustain a reduction in yield." The defendants do not specifically question the quantum awarded for mental anguish, anxiety, and distress. As explained below, the defendants' questioning of the appropriateness of the general damages award in light of the theories of recovery pled, was not timely made through their exception of no cause of action. As for the argument raised in the defendants' brief regarding the applicability of general damages to each of the plaintiffs, we find that the record supports the jury's factual determination that each of the plaintiffs suffered "mental anguish, anxiety, and distress" related to the crop failure and the inability to secure crop loans. Although Derritt and Joseph were the only two plaintiffs to physically farm, each plaintiff was liable for the debt associated with the 2002 and 2003 crop. As the 2003 farm-operating loan was denied by the bank, the plaintiffs' property was mortgaged and sizeable sums were obtained through credit card financing. These plaintiffs testified as to increased stress, irritability, and short tempers during the period. Furthermore, because the Agro debt remained outstanding at the time of trial, testimony indicated that similar financing was to be required for the 2004 crop. Accordingly, the record supports the determination that each of the plaintiffs suffered from mental anguish, anxiety, and distress due to the low yield crop. This assignment lacks merit. Attorney's Fees The defendants next question the separate attorney's fees awards made to the plaintiffs. The defendants contend that: "The cases were consolidated, and tried at one time over the course of approximately four (4) days. Defendants would suggest a total reasonable attorney fee in the range of $30,000-$50,000." In State, DOTD v. Williamson, 597 So. 2d 439, 442 (La.1992), the Louisiana Supreme Court explained that factors to be considered in determining the reasonableness of attorney's fees include: (1) the ultimate result obtained; (2) the responsibility incurred; (3) the importance of the litigation; (4) amount of money involved; (5) extent and character of the work performed; (6) legal knowledge, attainment, and skill of the attorneys; (7) number of appearances made; (8) intricacies of the facts involved; 935 (9) diligence and skill of counsel; and (10) the court's own knowledge. Having reviewed the record in light of the above factors, we conclude that the attorney's fees awards were not excessive so as to require reduction. First, counsel for the plaintiffs recovered sizeable judgments. Notwithstanding the attorney's fees, the plaintiffs in the Derritt Matt action recovered a total of $163,847.50 and the plaintiffs in the Joseph Matt action recovered a total of $246,685.00. The attorney's fees awarded are equivalent to roughly one-third of the figure recovered. The record indicates that the trial on the matter lasted four days and that numerous witnesses were questioned, expert witnesses were obtained, and various pieces of evidence were entered into the record. The level of skill demonstrated by the plaintiffs' attorney is apparent from the content of the record and in the judgment obtained. In short, the record reveals no abuse of discretion in the jury's award in this regard. This assignment lacks merit. Exception of No Cause of Action Subsequent to the jury's verdict, the defendants filed an exception of no cause of action, asserting that the awards for nonpecuniary damages must be reversed. The exception was denied as untimely by the trial court. The defendants again argue that the exception should have been maintained as the plaintiffs' claim was one in redhibition and that only damages for economic loss are available. Louisiana Code of Civil Procedure Article 928(B) provides: "The peremptory exception may be pleaded at any stage of the proceeding in the trial court prior to a submission of the case for a decision. . . ." (Emphasis added.) In this case, the exception was not filed until after the jury's determination of the matter. Accordingly, the trial court's finding of untimeliness was not in error. As the trial court's ruling was on the procedural aspect of the exception, and this ruling was correct, the merits of the exception are not before this court. Reconventional Demand At trial, Agro sought a judgment reflecting the outstanding principle of the outstanding debt it contends was owed by the plaintiffs. In response to a question from the jury, a stipulation was entered indicating that "the principle [sic] amounts of Agro's claims" was $71,683.00 on the Derritt Matt loan and $171,073.42 on the Joseph Matt/Lake Chicot Partnership loan.[3] After this stipulation, the jury entered judgment against Derritt in the amount of $35,500.00 and against the Lake Chicot Partnership in the amount of $85,500.00. The defendants question the jury's failure to award the entire amount sought and contend that, given the stipulation, there was no basis in the record for the reduced amount. 936 In their answer to the appeal, the plaintiffs question whether any award for the reconventional demand was appropriate. The plaintiffs contend that the defendants failed to present evidence in the form of invoices, receipts, or testimony that would affirmatively establish the cross-claim. The plaintiffs also point out that although the stipulation set forth the principal amount of Agro's claim against them, it did not include a stipulation that the figures were owed or that a representative of the defendants testified as to the figures. As pointed out by the plaintiffs, the defendants have the burden of proof insofar as their reconventional demand is concerned. The plaintiffs assert that the defendants failed in their burden of proving the existence of an "open account," see Hurley State Bank v. Pickens, 03-911 (La. App. 3 Cir. 12/10/03), 861 So. 2d 846. However, the existence of such an account does not appear to have been particularly questioned at trial. Rather, it was whether that debt was owed. What was established, in part by testimony from the plaintiffs themselves, is that an outstanding debt remains from the purchase of products from Agro. Derritt affirmed in his testimony that a principal balance of approximately $72,000.00 remained. Similarly, Joseph testified that he was able to pay his outstanding debt associated with the 2002 year, except for that on the Agro account. As argued by the plaintiffs in their case in chief, the outstanding debt prevented both from obtaining a bank loan for their 2003. Due to this unresolved issue, neither plaintiff attempted to obtain a loan for the 2004 year. Furthermore, Kevin Conrad, a representative of Land O' Lakes who handles the company's agronomy and field claims, explained that his review of the invoices indicated that Derritt Matt's outstanding balance with was $71,683.30 and that Joseph/Lake Chicot Partnership's balance was $171,073.42. Although this testimony is limited, it establishes that the plaintiffs had outstanding balances on their accounts. Both plaintiffs acknowledged that these balances were outstanding. Absent any indication to the contrary, the jury was entitled to consider the admissions of the plaintiffs regarding the existence of the debt and conclude that at least a portion of that debt was owed. However, we find no merit in the defendants' assertion that, given the stipulation, the jury erred in failing to award the full amount sought. Reference to the stipulation indicates that it related only to the amount of the claim, not the amount actually owed. The record contains ample evidence to explain the jury's reduction of the amount it found actually owed of the debt. For example, the jury was aware that only a portion of the debt related to the defective corn seed as the plaintiffs farmed the more profitable corn seed as well as other crops. The jury also heard testimony regarding Agro's profit margin on the products sold, oftentimes a 100% increase. Further, recall that the jury made separate awards for the purchase price of the defective corn seed. In short, it is difficult to know what evidence or elements were considered in the jury's determination that the amount actually owed to Agro was approximately half of that claimed. What is clear is that the record supports an award for the outstanding debt given the plaintiffs' admission. However, the record also provides sufficient evidence of numerous factors justifying a determination that the amount owed was significantly less than that claimed by the defendants. This assignment lacks merit. Interest Rate for Reconventional Demand In their final assignment of error, the defendants contend that the trial court erred in deciding that the legal interest 937 rate of twelve percent was applicable to the reconventional demand rather than the eighteen percent it asserts that the plaintiffs contracted for. In considering the interest issue, the trial court concluded that the defendants failed to specifically plead that the eighteen percent interest rate was sought. Reference to the cross-claim indicates that the defendants summarily stated that outstanding balances were owed. The pleading was without reference to the eighteen percent interest rate or even to the existence of the Agro account. Given its general nature, and La.Code Civ.P. art. 861's requirement that special damages be specifically alleged, we find no error in the trial court's ruling that the pleading was insufficient to permit recovery. This assignment lacks merit. Costs Attributable to Corn Harvest In their answer to the appeal, the plaintiffs seek an additional award for costs encountered in bringing the corn seed to harvest. The plaintiffs note that, while testimony was presented as to these costs, the trial court denied their request to create a specific line damage award element for their recovery. The plaintiffs contend that this denial was erroneous pursuant to that portion of La.Civ.Code art. 2545 which provides that a buyer is entitled to recover "reimbursement of the reasonable expenses occasioned by the sale and those incurred for the preservation of the thing. . . ." In denying the plaintiffs' request for a separate line item for recovery of costs attributable to the harvest, the trial court explained: "I've read the article and my impression that . . . in an agricultural situation as we have here that the article does not intend that a plaintiff can recover [], both the money that they invest in the crop, in producing the crop [], as well as their lost profits." After review of La.Civ. Code art. 2545, we find no error in this ruling. The expenses sought in this case were not ones to "preserve a thing," but rather were expended to bring the crop to harvest. There is no evidence to suggest that these expenses were beyond those that would have been incurred if the seed had been as desired. Although the plaintiffs advance Dupree-Simpson Farms v. Helena Chemical Co., 28-739 (La.App. 2 Cir. 10/30/96), 682 So. 2d 838, for the proposition that both damages for a lost yield and for expenses can be recovered, there is no indication in the second circuit's opinion as to what the expenses were. Neither does it appear that the issue now before this court, i.e., whether recovery can be had for both lost profits and for expenses of raising the crop, was placed before the court in that case. Accordingly, we do not find the cited case persuasive on this issue. This assignment lacks merit. Attorney's Fees on Appeal Finally, the plaintiffs seek an increase in attorney's fees due to work performed on appeal. As the plaintiffs have successfully defended the appeal, have incurred additional expenses associated with the appeal, and have sought the increase in damages in accordance with proper appellate procedures, we find such an increase appropriate. See Riser v. Acadiana Limousine Service, 96-1687 (La.App. 3 Cir. 4/30/97), 693 So. 2d 330, writ denied, 97-1420 (La.9/19/97), 701 So. 2d 173; Stacks v. Mayflower Transit, Inc., 95-693 (La.App. 3 Cir. 11/2/95), 664 So. 2d 566. Accordingly, we find an increase in the award of attorney's fees in the amount of $6,000.00 warranted for work performed on appeal. DECREE For the foregoing reasons, the judgment in this consolidated matter is affirmed. As *938 explained above, a single $6,000.00 award is made to the plaintiffs for attorney's fees on the appeal of this consolidated matter. All costs of this appeal are assigned to the appellants, Land O' Lakes, Agro Distribution, LLC and Agrilliance, LLC. AFFIRMED. ADDITIONAL ATTORNEY'S FEES AWARDED ON APPEAL. NOTES [1] For decretal information in the companion case, see Derritt Matt, Jr., et ux. v. Agro Distribution, LLC, et al., 05-292 (La.App. 3 Cir. 6/1/05), ___ So.2d ___, 2005 WL 1283519. [2] Mr. Boykin explained that Cropland Genetics is owned by Land O' Lakes. [3] The trial court advised the jury of the stipulation as follows: [P]ursuant to the jury's request for what they call seed receipts, "Purchase Invoices," for Agro, for D. Matt, and J. Matt, I'm sending them Plaintiff's Exhibit, P-1 and P-2. Uh, for their verbal request when they were here as to the amount of Agro's claims against plaintiffs. The attorneys have agreed that rather than bring the jury back down, I would send them a note written by myself, that uh . . . it's dated today, has the time of 7:15 p.m. when I wrote it. And reads as follow[s]: `To the jury, the attorneys have stipulated that Mr. Kevin Connor testified that the principle amounts of Agro's claims are as follows: Derritt Matt ($71,683.30), Lake Chico [sic] Partnership ($171,073.42).' Signed by me. Upon the trial court's questioning of the parties' attorneys, both denied that there was an objection to the statement. The written version of the stipulation is contained in the record.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1826097/	975 So. 2d 687 (2008) Randy LACOMBE v. Marvin F. CARTER, Jr., et al. No. 07-1063. Court of Appeal of Louisiana, Third Circuit. January 30, 2008. 688 Robert G. Nida Gold, Weems, Bruser, Sues & Rundell, Alexandria, LA, for Defendants/Appellants, Shawn N. Daze and Brian Mabou. Rodney M. Rabalais, Attorney at Law, Marksville, LA, for Plaintiff/Appellee, Randy Lacombe. Court composed of OSWALD A. DECUIR, MICHAEL G. SULLIVAN, and JAMES T. GENOVESE, Judges. DECUIR, Judge. This is a trespass action based on the defendants' refusal to remove duck blinds and other structures from the plaintiff's property. FACTS Plaintiff, Randy Lacombe, purchased property adjacent to Saline Bayou. A portion of the purchased property is inundated by water due to a control structure built by the State in the 1960s. Prior to Lacombe's purchase, the defendants, Shawn N. Daze, Brian Mabou, Marvin Carter, Jr., and William L. Smith, had erected duck blinds and a floating boathouse on the property. Subsequently, Lacombe asked the defendants to remove the structures. They refused, and Lacombe filed this suit alleging trespass on the part of the defendants. Defendants then circulated flyers and posted signs stating that Lacombe was endangering hunting and fishing rights in the Saline Bayou area. Subsequently, the defendants answered and filed an exception alleging that the inundated area is a navigable waterway and that the State of Louisiana (State) owns or has a servitude over the property and is, therefore, an indispensable party. The trial court granted the exception, and the State was joined as a party. Lacombe amended his petition to seek a declaratory judgment declaring him to be owner of the property. In addition, Lacombe requested that, if and only if the State disputed the boundary between the parties, the court fix the boundary. The trial court declared the boundary to be as that presented in evidence, ordered the defendants to vacate Lacombe's property and remove existing structures, and enjoined them from future entry. In addition, the trial court concluded that the defendants did trespass on Lacombe's property and awarded Lacombe damages of $5,000.00 from each of the defendants. The defendants, Daze and Mabou, lodged this appeal. TRESPASS The defendants assert that the trial court erred in finding they had committed a trespass and in awarding excessive damages. In their brief, the defendants at once allege navigability as an issue and later decry it as a "red herring." We think they are correct in the latter instance. In the midst of much discussion about boundaries, navigable waterways, and hunting rights, the trial court was faced with a simple action in trespass. Accordingly, we will focus our attention on the tort of trespass. In discussing trespass, this court has said: 689 A trespass occurs when there is an unlawful physical invasion of the property or possession of another person. Additionally, In an action for trespass, it is incumbent upon the plaintiff to show damages based on the result or the consequences of an injury flowing from the act of trespass. The damages must be proved by a preponderance of the evidence, and this burden of proof may be met by either direct or circumstantial evidence. One who is wronged by a trespass may recover general damages suffered, including mental and physical pain, anguish, distress, and inconvenience. Griffin v. Abshire, 04-37, p. 11 (La.App. 3 Cir. 6/2/04), 878 So. 2d 750, 757-58, writ denied, 04-1663 (La.10/8/04), 883 So. 2d 1018. (Citations omitted). In the case before us, Lacombe is in actual possession of the property in question, and the defendants do not claim ownership in themselves. The appropriate burden of proof for Lacombe is well settled in our law. Under these circumstances, it is not necessary that plaintiff should show a title perfect in all respects; and, even if there be defects in plaintiff's title, they are not available as a defense to defendant company, a mere trespasser. Jamison v. Smith, 35 La. Ann. 609; Stille v. Schull, 41 La. Ann. 816, 6 So. 634; Vicksburg, S. & P.R. Co. v. Sledge, 41 La. Ann. 896, 6 So. 725; Gould v. Bebee, 134 La. 123, 63 So. 848. River & Rail Terminals v. La. Ry. & Nav. Co., 171 La. 223, 236, 130 So. 337, 341 (1930). "A prima facie title is good against trespassers." Gould v. Bebee, 134 La. 123, 126, 63 So. 848, 849 (1913). The question for this court is whether the trial court correctly concluded that the defendants had committed a trespass. The trial court summarized the evidence in its written reasons for judgment as follows: Mr. Lacombe produced deeds, a survey, official state maps, and testimony showing he has title to the land where the defendants blinds and floating structures are located. He produced the expert testimony of Jessie Lachney, showing the defendants['] blinds and floating structure are located on land, acquired and included in the 2000 sale. Lachney used a GPS unit to locate the exact position of the blinds and floating structure relative to Lacombe's property line. The State's representative, John P. Evans, Jr., P.L.S. Chief, Titles, Surveys & GIS of the State Land Office, also testified that the defendants['] blinds and floating structure are on Lacombe's land and that the State makes no claim to Lacombe's inundated land. After reviewing the evidence, it is clear that Lacombe has met his burden of proof with regard to his title and its limits. The defendants have produced no evidence that establishes the boundary is not as agreed by Lacombe and the State and represented in the judgment of the trial court. Moreover, this court has consistently held that a trial court's determination of a boundary location is a finding of fact which will not be disturbed on appeal unless it is manifestly erroneous. Lamson Petroleum Co. v. Hallwood Petroleum, Inc., 99-1444 (La.App. 3 Cir. 5/24/00), 770 So. 2d 786, writ denied, 00-2568 (La.11/27/00), 775 So. 2d 448; see also Barker v. Quality Builders, Inc., 503 So. 2d 1170 (La.App. 3 Cir.1987); Broussard v. Coleman, 479 So. 2d 1016 (La.App. 3 Cir.1985), writ denied, 481 So. 2d 1354 (La.1986). Accordingly, we find no manifest error in the trial court's determination that the defendants committed a trespass on Lacombe's property. *690 We next turn to defendants' claim that the trial court's damage award was excessive. In an action for trespass, the plaintiff must show damages based on the result or the consequences of an injury flowing from the act of trespass. Bell v. Sediment Removers, Inc., 479 So. 2d 1078 (La.App. 3 Cir. 1985), writ denied, 481 So. 2d 1350 (La.1986). The damages must be proved by a preponderance of the evidence, and this burden of proof may be met by either direct or circumstantial evidence. Id. One who is wronged by a trespass may recover general damages suffered, including mental and physical pain, anguish, distress, and inconvenience. Ard v. Samedan Oil Corp., 483 So. 2d 925 (La. 1986). Mental anguish does not result of necessity from a trespass or the encroachment on a person's property. Even though mental anguish may be compensable, it must be proven with sufficient evidence. Bell, 479 So. 2d 1078. However, mental anguish does not require proof that medical or psychiatric care was required as a result of the incident, but minimal worry and inconvenience should not be compensated. Phillips v. Town of Many, 538 So. 2d 745 (La.App. 3 Cir.1989). In the present case, Lacombe was prevented from using or leasing his property to the fullest extent by the presence of defendants' blinds and floating structure. In addition, the defendants intentionally set out to attack Lacombe's standing in the community by placing flyers naming him as a party seeking to take away the hunting and fishing rights of sportsmen. Lacombe testified that some individuals quit frequenting his hardware business because of the flyers produced by the defendants. Under these circumstances, we do not find the trial court's damage award to be manifestly erroneous. BOUNDARY The defendants' remaining assignments of error contest the boundary set by the trial court. At the outset, we note that this boundary is established solely for purposes of this tort action. The action for the tort of trespass is not one of the real actions provided for in the Louisiana Code of Civil Procedure. Brown v. Bedsole, 447 So. 2d 1177 (La.App. 3 Cir.), writ denied, 450 So. 2d 358 (La.1984). In addition, this court has held that those who hunt or fish on land that is inundated by waterways belonging to the State do not have a right of action to fix boundaries between the State and a private landowner. Schoeffler v. Drake Hunting Club, 05-499 (La.App. 3 Cir. 1/4/06), 919 So. 2d 822. In the present case, neither Lacombe nor the State has disputed the boundary between them. We have found no manifest error in the trial court's determination of the boundary for purposes of this trespass action. Likewise, we find no grounds for allowing defendants to convert this tort action into a real action to force the State to fix a boundary between it and a private landowner. Accordingly, these assignments of error have no merit. FRIVOLOUS APPEAL Lacombe requests that we award attorney fees for frivolous appeal. Under the circumstances of this case and given the lack of clarity with regard to the law as it involves inundated lands, we do not believe an award of attorney fees is warranted. DECREE For the foregoing reasons, the judgment of the trial court is affirmed. All costs of these proceedings are taxed to defendants Shawn N. Daze and Brian Mabou. AFFIRMED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2562501/	255 F.Supp.2d 579 (2003) Robert C. PENNY, et al., Plaintiffs, v. ORTHALLIANCE, INC., Defendant. No. CIV.A.3:01-CV-1569-N. United States District Court, N.D. Texas, Dallas Division. March 27, 2003. David Bryant, Diamond McCarthy Taylor Finley Bryant & Lee, Dallas, TX, Roger B Cowie, Lead Attorney, Thomas Allan Connop, Locke Liddell & Sapp, Dallas, TX, for Robert C. Penny. Amy M Winters, Joseph J Lowenthal, Jr, Mark A Cunningham, Stewart E Niles, Jr, Jones Walker Waechter Poitevent Carrere & Denegre, New Orleans, LA, James P Karen, Lead Attorney, Tamara Marinkovic, Jones Day, Dallas, TX, Michael J McConnell, Jones Day, Atlanta, GA, for Orthalliance, Inc. MEMORANDUM OPINION AND ORDER GODBEY, District Judge. Before the Court is Plaintiffs' amended motion for partial summary judgment filed on December 14, 2001. For the reasons stated below, Plaintiffs' motion is GRAINED. I. BACKGROUND Robert C. Penny ("Penny"), Keith Stewart ("Stewart"), and William M. Reeves ("Reeves") (the "Individual Plaintiffs") are doctors of dental surgery, specializing in the practice of orthodontics; the Individual Plaintiffs are all licensed to practice dentistry in Texas. The Defendant, Orthalliance, Inc. ("Orthalliance"), provides business and consulting services to orthodontic entities. The Plaintiffs Penny Orthodontics, P.C. ("Penny P.C"), Stewart Orthodontics, P.C. ("Stewart P.C"), William M. Reeves, P.C. ("Reeves P.C") (collectively "Practice Groups" or "Groups"), the Individual Plaintiffs, and Orthalliance[1] entered into a series of agreements in which Orthalliance acquired the physical assets of 580 the Individual Plaintiffs' orthodontic practices and agreed to provide practice management services. In return, the Individual Plaintiffs received a substantial amount of money and agreed to remain working at their practices for at least five years and to not compete with Orthalliance following the termination of the Parties' agreements. The Plaintiffs claim that Orthalliance failed to perform its obligations under the agreements and now bring this action seeking various forms of relief including a declaration regarding the invalidity of the Parties' agreements as constituting the unauthorized practice of dentistry. Although some differences exist among the transactions entered into by the Parties, each involve certain core contracts: (1) a "Purchase and Sale Agreement" between Orthalliance and each Individual Plaintiff or their respective formerly owned corporation; (2) a "Service Agreement" between Orthalliance and the respective Practice Group; and (3) an "Employment Agreement" between the Individual Plaintiff and his Practice Group (collectively "Agreements"). Under the Purchase and Sale Agreement, Reeves sold to Orthalliance his leasehold interests in the offices he maintained, his equipment, tools, furniture, furnishings, fixtures, inventory, supplies, technology, files, records (other than patient records), patient lists, supplier lists and all other personal property located at his orthodontic offices. Penny and Stewart executed similar Purchase and Sale Agreements[2] with Orthalliance, the outcome of which invested Orthalliance with title to all of the tangible assets of each orthodontic practice; in these contracts, the former professional corporations of Penny and StewartRobert C. Penny, D.D.S., M.S., Inc. and Keith J. Stewart, D.D.S., P.C.were merged into Orthalliance. The Individual Plaintiffs then created new professional corporations, the Practice Groups, through which they conducted aspects of their orthodontic practices. The Service Agreements executed between the Practice Groups and Orthalliance are all substantially alike. Orthalliance contracted to provide the Practice Groups with comprehensive practice management, financial and marketing services, and such facilities, equipment, and support personnel as reasonably required by the Practice Groups to operate. Orthalliance assumed all power and authority reasonably necessary to manage the business affairs of the orthodontic offices, but disclaimed control over decisions relating to patient treatment. Orthalliance further agreed to employ the Practice Groups' non-professional staff and provide the Groups with various services, including payroll, business systems and procedures, purchasing, information systems, legal services, marketing, and planning. Orthalliance charged a fee for its services that was tied to a percentage of the Practice Groups' adjusted gross revenue. Under the Service Agreements, Orthalliance controls the Practice Groups' accounts receivable and deposits the proceeds from the accounts into bank accounts in the Groups' various names, over which Orthalliance exercises sole control. From the Groups' bank account, Orthalliance first deducts its service fee, then deducts "Center Expenses"; these Expenses include salaries and benefits of the Orthalliance staff at the Practice Groups' offices, the direct 581 costs of Orthalliance's other employees who provide services to the Practice Groups, the rent for the orthodontic offices, personal property taxes on the tangible assets owned by Orthalliance and used by the Practice Groups, depreciation on those assets, and other expenses incurred by Orthalliance. After Orthalliance pays the Center Expenses, it remits the remainder of the accounts receivable proceeds to the Practice Group. The Service Agreements also contain a covenant not to compete ("Non-Compete"). The Non-Compete prohibits the Practice Groups from opening any additional offices within a ten mile radius of their existing locations without the consent of Orthalliance and from advertising or soliciting patients, staff or referrals for a period of two years after the termination of the Service Agreements. The Service Agreements further obligate the Practice Groups to enter into Employment Agreements with the Individual Plaintiffs. The Employment Agreements, to which Orthalliance is a stated third-party beneficiary of some provisions, require the Individual Plaintiffs to work for their respective Groups at Orthalliance's newly acquired offices for an initial term of five years and contain restrictive covenants similar to those found in the Service Agreements. II. The Interrelationship of the Agreements Impermissibly Allows Orthalliance to Practice Dentistry The threshold issue before the Court is whether the Parties' Agreements are illegal, and therefore invalid, because their interrelationship allows Orthalliance to practice dentistry without a license in violation of the Texas Dental Practices Act, TEX. OCC. CODE ANN. §§ 251.001, et seq. ("TDPA" or the "Act"). A person may not practice dentistry, under the TDPA, without a valid license issued by the Texas State Board of Dental Examiners. TEX. OCC. CODE ANN. § 256.001 (Vernon Supp.2003). Section 251.003 of the TDPA sets forth several categories of activities that constitute the practice of dentistry under the Act. A person practices dentistry if, among other things, he or she "owns, maintains, or operates an office or place of business in which the person employs or engages under any type of contract another person or persons to practice dentistry ...." Id. § 251.003(a)(4). The Court has been unable to find legislative history, case law, or attorney general opinions construing section 251.003(a)(4) of the TDPA. The Court, therefore, will apply the rules of statutory construction to interpret the language of this provision. In construing a statute, a court tries to determine and give effect to the legislature's intent. State v. Gonzalez, 82 S.W.3d 322, 327 (Tex.2002). A court looks first to the "plain and common meaning of the statute's words." Id. (internal citations omitted). If a statute's meaning is unambiguous, a court will generally interpret the statute according to its plain meaning. Id. With respect to the issue presented in this case, sections 251.003(a)(4) and 256.001 of the TDPA are unambiguous. A person without a valid license issued by the Texas Board of Dental Examiners cannot own, maintain, or operate an office in which the person employs under any type of contract another person to practice dentistry. The language of the TDPA is clear and broad. "Owns, maintains, or operates" are well defined and commonly understood terms, and the legislature's use of the disjunctive "or" signifies that engaging in any of the three actions violates the provision. Further, the unambiguous language of the statute prohibits a dentist's employment or engagement under any type of contract at an office owned, maintained, r operated by non-licensed persons 582 The Court finds the use of the word "any" to be significant. See G.M. Trading Corp. v. Commissioner, 121 F.3d 977, 981 (5th Cir.1997) (relying on the broad scope of the plain meaning of "any"). The legislature's deliberate wording of the TDPA indicates its intent to broadly prohibit a dentist's employment or engagement by a non-licensed person. The Court, therefore, shall interpret the relevant provisions of the Act in accordance with the intent of the legislature. The Court finds, in interpreting the plain language of the TDPA, that the Agreements are violative of sections 251.003(a)(4) and 256.001 of the Act and, therefore, are illegal because: (1) the Purchase and Sale Agreements transfer title in all of the tangible assets of the orthodontic offices to Orthalliance, thus transferring ownership of the offices to Orthalliance; (2) the Service Agreements obligate Orthalliance to operate and maintain the orthodontic offices; and (3) the Employment Agreements require that the Individual Plaintiffs remain employed at Orthalliance's offices for a term of years, therefore Orthalliance employs or engages the Individual Plaintiffs. The interrelationship of the Agreements thus permits Orthalliance to own, operate, and maintain the offices in which it employs or engages the Individual Plaintiffs to practice dentistry. First, Orthalliance owns the orthodontic offices or leaseholds as shown by the Purchase and Sale Agreements. An "office" is "a place in which business, clerical, or professional activities are conducted." THE AMERICAN HERITAGE DICTIONARY OF THE AMERICAN LANGUAGE (4th ed.2000). Here, the orthodontic offices are the places where the Individual Plaintiffs conduct their professional activities. The Purchase and Sale Agreements invest Orthalliance with title to all of the offices' tangible assets. "To own" is defined as "to have or possess as property" or "to have control over." Id. By virtue of possessing the title to the offices' assets and controlling these assets in accordance with the Service Agreements, Orthalliance owns the orthodontic offices.[3] Next, Orthalliance operates and maintains the orthodontic offices pursuant to the Service Agreements. "To operate" is defined as "to control the functioning of; run" or "to conduct the affairs of; manage."[4]Id. In the Service Agreements, Orthalliance contracted to provide the Practice Groups with comprehensive practice management. As part of this comprehensive management, Orthalliance controls the functioning of, runs, conducts the affairs of, and manages the orthodontic offices. Orthalliance assumes all power and authority necessary to manage the business affairs of the orthodontic offices. Orthalliance employs the offices' non-professional staff and provides the Plaintiffs with comprehensive services, including payroll, business systems and procedures, purchasing, information systems, legal services, marketing, and planning. Orthalliance controls the Practice Groups' accounts receivable and deposits the proceeds into a bank account in the Groups' name, over which Orthalliance exercises sole control. Indeed, the express purpose of the Service Agreements is to allow Orthalliance to control 583 the functioning of or to manage the orthodontic offices. Further, the Service Agreements require that Orthalliance maintain the orthodontic offices. "To maintain" is "to keep up or carry on; continue." Id. All of the obligations assumed in the Service Agreements by Orthalliance not only require Orthalliance to operate the orthodontic offices on a day to day basis, but also to maintain the offices. The term of the Service Agreements is for twenty or twenty-five years, therefore Orthalliance must keep up or continue its services for an extended period of time. Accordingly, Orthalliance must maintain the orthodontic offices pursuant to the Service Agreements. Lastly, Orthalliance employs or engages the Individual Plaintiffs to practice dentistry at the orthodontic offices which it owns, operates, and maintains. The Individual Plaintiffs practice orthodontics, a dental specialty, at Orthalliance's offices. The Employment Agreements, executed between the Individual Plaintiffs and their respective Practice Groups, require the Individual Plaintiffs to remain employed at Orthalliance's offices for an initial term of five years. In the Service Agreements, Orthalliance requires that the Practice Groups enter into the Employment Agreements with the Individual Plaintiffs. Thus, Orthalliance employs or engages the Individual Plaintiffs by virtue of the Parties' contractual scheme. The Parties seek to accomplish in a trilateral contract that which they cannot in a bilateral contract, an express written employment contract. However, the TDPA was written explicitly to sweep more broadly than a direct employment relationship: "employs or engages under any type of contract ...." "To engage" is defined as "to obtain or contract for the services of." THE AMERICAN HERITAGE DICTIONARY OF THE AMERICAN LANGUAGE (4th ed.2000). Thus, the Act was expressly phrased to prevent parties from circumventing the prohibitions on the corporate practice of dentistry through indirect business relationships. The Agreements, when construed together, result in Orthalliance engaging or obtaining the services of the Individual Plaintiffs.[5]See Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex.2000) (single transaction encompassing multiple written agreements may be construed together as one contract). Thus, the Agreements contravene the TDPA. See Flynn Bros., Inc. v. First Med. Assocs., 715 S.W.2d 782, 785 (Tex.App. Dallas 1986, writ ref d n.r.e.) (holding the design, effect, and purpose of the parties' whole contractual scheme was developed to do indirectly that which they could not do directly under the Medical Practices Act). The Court, therefore, declares the Agreements illegal in their entirety. See Sacks v. Dallas Gold & Silver Exch., Inc., 720 S.W.2d 177, 180 (Tex.App.Dallas 1986, no writ) (holding entire agreement invalid when the illegal provisions could not be severed from the legal provision because the legal and illegal activities were so commingled). Plaintiffs' amended motion for summary judgment is therefore GRANTED. NOTES [1] Penny and Stewart entered into their agreements with Premier Orthodontic Group, Inc. ("Premier"). In 1997, Orthalliance merged with Premier and assumed all of the rights and obligations of Premier under the contracts with the Plaintiffs. Accordingly, Premier shall be referred to as Orthalliance for the remainder of this opinion. [2] The Purchase and Sale Agreements entered into by Penny and Stewart are entitled Agreement and Plan of Reorganization. For the purposes of this Opinion, the differing titles of the contracts are unimportant, and Penny's and Stewart's contracts will be referred to as Purchase and Sale Agreements. [3] In this context, the Court finds that Orthalliance's ownership of the offices' leaseholds and tangible assets is sufficient to show that Orthalliance owned the orthodontic offices. The Court does not understand "own" as used in the statutory context to require fee simple ownership of the office real property and structure. [4] This definition of operate reflects the transitive form of the verb. The selection of the transitive form is consistent with the language of the section 251.003(a)(4) because "operates an office" requires the direct object "office" to complete the meaning of the verb. [5] Under the facts of this case, Orthalliance may also employ the Individual Plaintiffs: however, the Court shall not decide this issue, because Orthalliance clearly engages the Individual Plaintiffs.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1613555/	821 So.2d 633 (2002) STATE of Louisiana, Appellee v. Elbert TAYLOR, Jr., Appellant. No. 36,066-KA. Court of Appeal of Louisiana, Second Circuit. June 12, 2002. 635 Wilson Rambo, Monroe, for Appellant. Richard Ieyoub, Attorney General, Paul J. Carmouche, District Attorney, Laura Wingate Lea Hall, Assistant District Attorneys, for Appellee. Before NORRIS, CARAWAY and KOSTELKA, JJ. NORRIS, Chief Judge. The defendant, Elbert Taylor Jr., was indicted for the aggravated rape of his six-year-old niece, L.T. La. R.S. 14:42 A(4). A jury found him guilty as charged, and the District Court imposed the mandatory sentence of life at hard labor without benefit of probation, parole or suspension of sentence. Taylor now appeals, urging 10 assignments of error. We affirm. Factual background On Christmas morning 1999, the victim's mother, Stephanie, went to her mother's home on West 82nd Street in Shreveport. She brought along her two daughters, including six-year-old L.T. Many relatives were present, including the 39 year old defendant, who is Stephanie's brother and L.T.'s uncle. At some point, Stephanie left to pick up some other relatives. At the time, L.T. was playing in the yard with other children. When Stephanie returned, L.T. was not in the yard, resulting in a search for the missing child. Stephanie found Taylor in a bathroom, taking a shower. Through the locked door, Taylor told Stephanie that L.T. had gone to a neighbor's house, but Stephanie knew this was untrue as she had already been there. Stephanie could see through a crack in the door that Taylor was clothed, but he still insisted he was taking a shower and refused to come out. According to Stephanie, he stayed in the bathroom for an hour or two, raising her suspicions. When Taylor finally opened the door, Stephanie came in and started searching the bathroom. She found L.T. in the cabinet under the lavatory, hidden under dirty clothes. The child was clothed and apparently unharmed, but extremely upset. Believing that Taylor had done something to the child, Stephanie called 911. While on the phone, she scuffled with Taylor, who left the house. The police then arrived; L.T. told Officer Hunt that Taylor made her "kiss him in the penis area until he peed in her mouth." Officer Hunt then left and apprehended Taylor on the other side of a drainage ditch, walking away from the scene. L.T. was taken to the LSU Medical Center Pediatric Clinic where she was examined by Dr. Atossa Stanley, a family practitioner. She found no cuts or bruises, but 636 saw that L.T.'s hymen was not intact. L.T. told Dr. Stanley that Taylor had called her into the bathroom; he put his "thing" in her mouth until he "peed white bleach"; he then told her to take off her clothes; he then put it in "down there," going "in and out." Dr. Stanley administered a rape kit test to L.T., and also took a statement from Stephanie. While at the hospital, L.T. also gave a statement to Detective Van Wray. She said that after her mother left that morning, Taylor called her into the bathroom; he then told her to "suck on his dick until he pede [sic ]"; he then told her to take off her clothes, and "stuck his thing inside of her coochie"; this made her hurt; finally, when he heard Stephanie calling for her, Taylor stuck her in the cabinet. Two days later, L.T. and her cousin, eight-year-old S.T., were taken to the Gingerbread House, a children's advocacy center. Janice Horton Reliford, a forensic interviewer, conducted videotaped interviews of both children following all protocols. She was explicit that while the interviews were being taped, nobody was present except the child and the interviewer; however, using an earpiece she could receive questions from Det. Van Wray, who was in a separate room with the girls' parents. In the interview, L.T. told Ms. Reliford that her uncle made her "suck his thing" and put "his thing in her coochie" until yellow stuff that "smelled like bleach" came out. In a separate interview with Ms. Reliford, S.T. said Taylor had grabbed her by the shirt and pulled her into the bathroom; S.T. told him to leave her alone, but he locked her in while he took a shower. Later, he told her that he would marry her when she got older. Ms. Reliford testified that both of the videotapes appeared to be accurate and correct. On January 4, 2000, L.T. returned to LSU Medical Center to be examined by Dr. Anne Springer, a pediatrician and the physician coordinator of the Child Abuse Diagnosis and Management Service. She did not take any statement, but examined L.T. with a colposcope, finding the child's hymenal opening "jagged and irregular" and scarring in the fossa navicularis. She concluded that something "too big to fit through the opening" had passed through it, tearing it and damaging the tissue; she described the action as "basically slamming into this tissue." She testified that it may have been a finger, but the evidence was not consistent with "straddle injuries," which would leave straight-line abrasions. Connie Brown, a forensic DNA analyst at the North Louisiana Crime Lab, examined the rape kit, L.T.'s panties and clothing, and Taylor's clothing, together with oral samples taken from Taylor. She testified that one of the stains on L.T.'s panties, and her oral swab, tested positive for PSA, an antigen found only in seminal fluid. However, there was not enough spermatozoa on either sample to conduct DNA analysis. As noted, the Caddo Parish grand jury indicted Taylor for aggravated rape, citing R.S. 14:42 A(4), based on the fact that L.T. was under the age of 12. The State filed notice of its intent to use other crimes evidence pursuant to La.C.Cr.P. art. 720 and La. C.E. art. 404 B, specifically that Taylor "had previous sexual contact and vaginal sexual intercourse with the juvenile victim L.T., and also has made inappropriate and lustful comments to juvenile victim S.T." The State also filed notice of its intent to use the videotapes of the minors at trial, pursuant to La. R.S. 15:440.1. After a hearing on April 3, 2001, the District Court ruled that the other crimes evidence and the videotapes were admissible. 637 The case went to trial in August 2001. In addition to the evidence outlined above, L.T. testified that everything she said on the video was true, and that her uncle had done this to her "lots," at least three times. On cross examination, she agreed with defense counsel's suggestion that her mother was present in the room while the video was being made. Her cousin, S.T., testified that Taylor had told her he intended to marry her, but he had never touched or hurt her. At the close of evidence, Taylor moved for mistrial on grounds that the video of S.T.'s interview did not satisfy La. C.E. art. 404 B, in that it failed to show any pattern or system of actions. This motion was denied. Taylor also moved that the statutory responsive verdicts of forcible rape and attempted forcible rape should be included as responsive verdicts. The court denied this motion, finding no evidence of force. The jury found Taylor guilty as charged of aggravated rape. The vote was 11-1. Taylor filed a motion for post verdict judgment of acquittal, which was denied. The court sentenced him to the mandatory sentence of life at hard labor, without benefit of probation, parole or suspension of sentence. This appeal followed. DiscussionSufficiency of the evidence By his first and eighth assignments Taylor urges the evidence was legally insufficient to sustain his conviction. He urges that the only direct evidence was the testimony of L.T., which was tainted by suggestive questions; all the other evidence, chiefly the testimony of expert witnesses, was circumstantial, inconclusive and contradictory. As it applies to this case, aggravated rape is defined as rape where the anal, oral or vaginal sexual intercourse is deemed to be without lawful consent of the victim because the victim is under the age of 12 years. Lack of knowledge of the victim's age is not a defense. La. R.S. 14:42 A(4). When issues are raised on appeal both as to the sufficiency of the evidence and as to one or more trial errors, the reviewing court first analyzes the sufficiency issue. This is because the accused may be entitled to an acquittal under Hudson v. Louisiana, 450 U.S. 40, 101 S.Ct. 970, 67 L.Ed.2d 30 (1981), if a rational trier of fact, viewing the evidence in accord with Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979), in the light most favorable to the prosecution, could not reasonably conclude that all of the elements of the offense have been proved beyond a reasonable doubt. State v. Hearold, 603 So.2d 731 (La.1992); State v. Bosley, 29,253 (La.App. 2 Cir. 4/2/97), 691 So.2d 347, writ denied 97-1203 (La.10/17/93), 701 So.2d 1333. The standard of appellate review for sufficiency of the evidence is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, supra; La.C.Cr.P. art. 821. The Jackson standard applies to all evidence, both direct and circumstantial, to test whether it is sufficient to prove guilt beyond a reasonable doubt to a rational jury. State v. Neal, 00-0674 (La.6/29/01), 796 So.2d 649; State v. Owens, 30,903 (La. App. 2 Cir. 9/25/98), 719 So.2d 610, writ denied 98-2723 (La.2/5/99), 737 So.2d 747. The appellate court's authority to review questions of fact in a criminal case is limited to the sufficiency evaluation of Jackson v. Virginia, supra, and does not extend to credibility determinations made by the trier of fact. La. Const. Art. 5, § 10(B); State v. Williams, 448 So.2d 753 (La.App. 2 Cir.1984). Within the bounds 638 of rationality, the trier of fact may accept or reject, in whole or in part, the testimony of any witness. State v. Casey, 99-0023 (La.1/26/00), 775 So.2d 1022; State v. Bosley, supra. In the absence of internal contradiction or irreconcilable conflict with physical evidence, one witness's testimony, if believed by the trier of fact, is sufficient support for a requisite factual conclusion. State v. Davis, 35,298 (La.App. 2 Cir. 12/5/01), 803 So.2d 256; State v. White, 28,095 (La.App. 2 Cir. 5/8/96), 674 So.2d 1018, writ denied 96-1459 (La.11/15/96), 682 So.2d 760. Evidence of flight, concealment, and attempt to avoid apprehension is relevant because it indicates consciousness of guilt and this is a circumstance from which the jury may infer guilt. State v. Fuller, 418 So.2d 591 (La.1982); State v. Wade, 33,121 (La.App. 2 Cir. 4/15/00), 758 So.2d 987, writ denied 00-2160 (La.9/28/01), 797 So.2d 684. In her videotape, the L.T. clearly described how Taylor made her perform oral sex on him and then had sexual intercourse with her. She described numerous explicit acts that would not be otherwise known to a six-year-old child. This proves every essential element of the crime. La. R.S. 14:42 A(4). Despite Taylor's contention that her testimony was tainted by suggestive questions, we note that L.T. spontaneously related the same details to her mother right after the incident, and to Dr. Stanley and Det. Van Wray later the same day. The video interview was facilitated by Ms. Reliford, but was substantially the same. In short, we see no reason to reject the jury's decision to accept L.T.'s description of Taylor's conduct. Moreover, the circumstantial evidence is far from inconclusive or inconsistent with L.T.'s testimony. This evidence includes the forensic finding of PSA on her panties and in her mouth; two expert physicians' findings of repeated vaginal penetrations; and Taylor's own conduct in initially denying that L.T. was in the bathroom and later trying to evade the officer. This evidence totally corroborates L.T.'s description of Taylor's conduct. Viewed in the light most favorable to the State, the evidence supports a finding, beyond a reasonable doubt, that Taylor committed an aggravated rape of L.T. These assignments of error lack merit. Admissibility of L.T.'s videotape By his second, third and fourth assignments Taylor urges the District Court erred in admitting the videotape of L.T.'s interview. He specifically contends that L.T.'s mother, Stephanie, was present in the room while the interview was conducted, in violation of R.S. 15:440.4 A(2), and that the interview was tainted by "four separate interviews" before Ms. Reliford videotaped her at the Gingerbread House. He also contends that trial counsel was ineffective for failing to seek a mistrial when the District Court admitted the videotape into evidence.[1] A videotape of a child 14 years of age or under may be offered in evidence either for or against a defendant charged with the rape or physical or sexual abuse of a child. La. R.S. 15:440.4 A. To render the tape competent evidence, the party offering it must satisfactorily prove: "(1) That such electronic recording was voluntarily made by the victim of the physical or sexual abuse. "(2) That no relative of the victim of the physical or sexual abuse was present in the room where the recording was made. 639 "(3) That such recording was not made of answers to interrogatories calculated to lead the child to make any particular statement. "(4) That the recording is accurate, has not been altered, and reflects what the witness or victim said. "(5) That the taking of the child's statement was supervised by a physician, a social worker, a law enforcement officer, a licensed psychologist, a licensed professional counselor, or an authorized representative of the Department of Social Services." Id. The presence of a relative in the room where the interview is being conducted renders the videotape inadmissible. State v. Bennett, 591 So.2d 1193 (La.App. 1 Cir.1991), writ denied 594 So.2d 1315 (La.1992).[2] The District Court has great discretion in ruling on pretrial matters. Unless contrary to law, the court's rulings will not disturbed absent a clear showing of abuse of discretion. See, e.g., State v. Prudholm, 446 So.2d 729 (La.1984); State v. Huff, 27,212 (La.App. 2 Cir. 8/23/95), 660 So.2d 529, writ denied 96-0212 (La.5/1/97), 693 So.2d 754. As noted, L.T.'s videotaped interview was conducted at the Gingerbread House, a child abuse support facility in Shreveport, by Ms. Reliford, a forensic examiner with a B.S. in psychology and an M.S. in family therapy. Ms. Reliford testified at the pretrial hearing that only she and L.T. were in the room when the interview was taped. The tape itself corroborates this: nobody else is seen in the video portion, no other voices are heard on the audio, and the participants make no gestures or references to anybody else in the room. Ms. Reliford testified that Det. Van Wray and L.T.'s mother, Stephanie, were in the building, but in another room. The detective corroborated this. Taylor objected on grounds that R.S. 15:440.1 is unconstitutional and that the tape was hearsay; the District Court ruled that the tape was admissible, noting Taylor's objection. R.pp. 129, 132. At trial, Taylor did not object to the introduction of L.T.'s videotape into evidence. R.p. 207. As such, the issue is technically not before us. However, because Taylor objected at the pretrial hearing and because the record is complete, we will address the argument briefly. Taylor argues that trial evidence undermined the court's pretrial decision to admit the L.T.'s videotape. Specifically, he cites L.T.'s testimony on cross examination. Defense counsel asked her, "And when you were making that video, was she [Stephanie] in that same room, the same room?" L.T. replied, "Yes, sir." Defense counsel reiterated, "She was in the same room. We don't ever see her on the video, but she was there?" Again, L.T. replied, "Yes, sir." He argues that the matter of who was in the room is easy to recollect; thus court should have accepted L.T.'s statements instead of the testimony of "the professionals." He further suggests that Ms. Reliford and Det. Van Wray "were either in error in their recollection or intentionally misrepresented the situation * * to secure the videotape's admission into evidence." Br., 16. We perceive no error. The District Court saw and heard each of the witnesses, thus placing it in the superior position 640 to accept Ms. Reliford and Det. Van Wray's version of the interview, which is corroborated by the tape itself. L.T.'s remarks to the contrary were nothing more than assent to somewhat suggestive questions. There is nothing in this record to support Taylor's claim of intentional misrepresentation. Finally, Taylor argues that by the time L.T. made the videotape on December 27, she had already been exposed to "suggestive interviews" by her mother, Officer Hunt, Dr. Stanley, and Det. Van Wray. However, we have closely reviewed these witnesses' testimony. Each stated that he or she questioned L.T.; there is no evidence that any of them tainted or influenced her account of the incident. This argument lacks merit. Even if the issue were properly preserved, we would find no error in the admission of L.T.'s videotape into evidence at trial, under R.S. 15:440.4. We pretermit any consideration of Taylor's claim that counsel was ineffective for failing to object to the admission of the tape. Admission of S.T.'s videotape By his fourth and fifth assignments Taylor urges the District Court erred in failing to grant a mistrial on grounds that S.T.'s videotape did not meet the requirements of La. C.E. art. 404 B. He correctly argues that evidence of prior bad acts is generally inadmissible under art. 404 B. He specifically argues that State v. Kennedy, 00-1554 (La.4/3/01), 803 So.2d 916, has greatly limited the admissibility of "lustful disposition" evidence to prior conduct involving the complaining witness, or to cases where it is relevant to prove specific intent, identity or plan. He further urges that S.T. testified inconsistently with her videotaped interview, thus making the latter inadmissible hearsay. The claim that S.T.'s videotape was inadmissible hearsay lacks merit. A videotape authorized by R.S. 15:440.1 et seq. is admissible in evidence as an exception to the hearsay rule. R.S. 15:440.3; State in Interest of R.C., 514 So.2d 759 (La.App. 2 Cir.), writ denied 516 So.2d 128 (La.1987). Turning to Taylor's other argument, we note that since the rendition of State v. Kennedy, supra, the legislature has responded by enacting La. C.E. art. 412.2, which provides in pertinent part: A. When an accused is charged with a crime involving sexually assaultive behavior, or with acts that constitute a sex offense involving a victim who was under the age of seventeen at the time of the offense, evidence of the accused's commission of another sexual offense may be admissible and may be considered for its bearing on the matter to which it is relevant subject to the balancing test provided in Article 403. This article, which clearly makes S.T.'s videotape admissible, took effect on August 15, 2001, two days into the instant trial. Arguably, art. 412.2 applies to this trial since it does not redefine criminal conduct or increase the punishment for criminal conduct. State ex rel. Olivieri v. State, 00-0172 (La.2/21/01), 779 So.2d 735, cert. denied 533 U.S. 936, 121 S.Ct. 2566, 150 L.Ed.2d 730 (2001). However, we decline to address the question of retroactivity because we find that the contested evidence satisfies art. 404 B. For evidence of other crimes to be admissible, at least one of the enumerated purposes in art. 404 B must be at issue, have some independent relevance, or be an element of the crime charged. State v. Kennedy, supra; State v. Jackson, 625 So.2d 146 (La.1993). In State v. Zornes, 34,070 (La.App. 2 Cir. 4/3/02), 814 So.2d 113, this court approved the use of the defendant's prior bad acts involving the 641 victim's older half-sister to prove intent or plan: Defendant's sexually assaultive behavior on the victim's half-sister was virtually identical [to that inflicted on the complaining witness]. This improper sexual conduct was carried out in the same manner, place and time as the charged offense. In both cases, the young children were in defendant's home and in his custody. Although the criminal conduct involving the older half-sister started earlier than the behavior in the charged offense, it continued to occur during the same time frame. The similarities warrant admissibility to show the occurrence of a crime through a common design. S.T.'s videotape established that Taylor grabbed her by the shirt and pulled her into the bathroom; S.T. told him to leave her alone, but he still locked her in while he took a shower, and later told her that he would marry her when she got older. This is strikingly similar to L.T.'s testimony that Taylor called her into the bathroom, made her engage in sexual acts with him, then kept her in the bathroom while he took a shower. Notably, Dr. Springer testified that molesters of small children often "groom" their victims by gradually leading them into sexual contact. This is consistent with Taylor's "promise" to marry S.T. when she got older. In short, this evidence is sufficient and relevant to show Taylor's design or plan in abusing his young nieces. State v. Kennedy, supra; State v. Zornes, supra. Moreover, assuming arguendo that the admission of S.T.'s video was error, it is subject to harmless error analysis. State v. Maise, 00-1158 (La.1/15/02), 805 So.2d 1141; State v. Zornes, supra (concurrence of Caraway, J.). The victim's graphic description of Taylor's conduct, together with the circumstantial evidence which we have already discussed in extenso, was so conclusive that the admission of S.T.'s videotaped interview could not have affected the verdict. These assignments lack merit. Responsive verdicts By his sixth and seventh assignments Taylor urges the District Court erred in excluding, pursuant to the State's motion, the responsive verdicts of forcible rape and attempted forcible rape. In support, he cites La.C.Cr.P. art. 814 A(8),[3] listing the responsive verdicts for aggravated rape, and art. 814 C, allowing the trial court to exclude a responsive verdict only when it is not sufficiently supported by the facts to reasonably permit a finding of guilt of that responsive offense. He contends that there was sufficient evidence of force, notably L.T.'s testimony that she was forced under the sink, and Dr. Springer's testimony that breaking L.T.'s hymen entailed great force and pain. The "force" element of forcible rape, R.S. 14:42.1 A, means there was no lawful consent because one or more of these circumstances was present: (1) When the victim is prevented from resisting the act by force or threats of physical violence under circumstances where the victim reasonably believes that such resistance would not prevent the rape. (2) When the victim is incapable of resisting or of understanding the nature of the act by reason of stupor or abnormal condition of the mind produced by a narcotic or anesthetic agent or other *642 controlled dangerous substance administered by the offender and without the knowledge of the victim. The instant charge is based on R.S. 14:42 A(4), in that the victim was under the age of 12. This form of aggravated rape is presumed to be without the lawful consent of the victim; force is not an element of rape of a child under the age of 12. State v. Folden, 135 La. 791, 66 So. 223 (1914). While some force or strength is inherent in the act of rape, the force contemplated by R.S. 14:42.1 is that which coerces the victim's consent and prevents his or her resistance. When such evidence is not present, the trial judge should not instruct the jury as to forcible rape or include it as a responsive verdict. State v. Henry, 449 So.2d 486 (La.1984); State v. Harris, 627 So.2d 788 (La.App. 2 Cir.1993), writ denied 93-3188 (La.3/18/94), 634 So.2d 851. The instant record contains no evidence that Taylor used threats of physical violence or drugged L.T. into submission. He may have forced her into the cabinet under the sink, but this was after the rape occurred. We perceive no error in excluding forcible rape and attempted forcible rape from the responsive verdicts. Excessive sentence By his ninth and tenth assignments Taylor urges the District Court erred in imposing an excessive sentence. He argues that even the statutory mandatory sentence may violate La. Const. Art. 1, § 20's protection against cruel, unusual or excessive punishment. State v. Dorthey, 623 So.2d 1276 (La.1993). He also contends that the court's failure to articulate a factual basis for sentence, La.C.Cr.P. art. 894.1, mandates reversal of his sentence and remand for resentencing. Taylor did not file a motion to reconsider sentence. He is therefore relegated to a claim of bare excessiveness. La.C.Cr.P. art. 881.1; State v. Mims, 619 So.2d 1059 (La.1993). When the State does not seek a capital verdict, aggravated rape of a child under the age of 12 carries a mandatory sentence of life imprisonment at hard labor without benefit of parole, probation or suspension of sentence. La. R.S. 14:42 D(2)(b). The courts have repeatedly held that this mandatory sentence is constitutional. State v. Foley, 456 So.2d 979 (La. 1984); State v. Ingram, 29,172 (La.App. 2 Cir. 1/24/97), 688 So.2d 657, writ denied 97-0566 (La.9/5/97), 700 So.2d 505. In brief, Taylor expounds general principles of the law of excessiveness, but does not clearly and convincingly show that he is exceptional or that because of unusual circumstances he is the victim of the legislature's failure to assign sentences that are meaningfully tailored to the culpability of the offender, the gravity of the offense, and the circumstances of the case. State v. Johnson, 97-1906 (La.3/4/98), 709 So.2d 672. On the evidence presented, this mandatory life sentence does not shock our sense of justice. State v. Dorthey, supra. These assignments lack merit. Conclusion For the reasons expressed, Elbert Taylor's conviction and sentence are affirmed. CONVICTION AND SENTENCE AFFIRMED. NOTES [1] Taylor moved for a mistrial on grounds that the tape of S.T. (not L.T.) was inadmissible. R.p. 297. This issue is directly addressed by his fifth assignment of error. [2] The admissibility of the videotape is subject to the additional requirements of R.S. 15:440.5, which partly overlap those of § 440.4. State v. Ledet, 96-0142 (La.App. 1 Cir. 11/8/96), 694 So.2d 336, writ denied 96-3029 (La.9/19/97), 701 So.2d 163. However, Taylor does not allege any violation of R.S. 15:440.5. [3] These are guilty, guilty of attempted aggravated rape, guilty of forcible rape, guilty of attempted forcible rape, guilty of sexual battery, guilty of simple rape, guilty of attempted simple rape, and not guilty.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1689394/	654 F.Supp. 402 (1987) UNITED STATES of America, Plaintiff, v. Aaron MOSKO, Phil Pinelli, David Pinelli, William Burbridge, Barry Cohen, Ronald Pitts, George O'Brien, Martin Mosko, Thomas Gottone, Daniel Mordecai, Ralph Lackey, Robert Sheehan, Bernard Jansen, Defendants. Crim. No. 86-CR-24. United States District Court, D. Colorado. February 12, 1987. 403 404 Thomas O'Rourke, Asst. U.S. Atty., Denver, Colo., Richard J. Marien, Organized Crime Section, Dept. of Justice, Kansas City, Mo., for the Government. John B. Moorhead, Bruce Pringle, Denver, Colo., for defendants Aaron Mosko and Martin Mosko. Joseph Saint-Veltri, Denver, Colo., for defendant Phil Pinelli. E. Michael Canges, Denver, Colo., for defendant David Pinelli. Arthur Swartz, Irvin Borenstein, Denver, Colo., for defendant William Burbridge. Brian Holland, Asst. Federal Public Defender, Denver, Colo., for defendant Barry Cohen. Leonard M. Chesler, Denver, Colo., for defendant Ronald Pitts. Gary Lozow, Denver, Colo., for defendant George O'Brien. Irving P. Andrews, Denver, Colo., for defendant Thomas Gottone. Robert Tabor Booms, Denver, Colo., for defendant Daniel Mordecai. Linda Creagan, Denver, Colo., for defendant Ralph Lackey. Rollie R. Rogers, Denver, Colo., for defendant Robert Sheehan. Jeralyn E. Merritt, Denver, Colo., for defendant Bernard Jansen. 405 MEMORANDUM OPINION AND ORDER MATSCH, District Judge. On February 5, 1986, a federal grand jury returned a thirty-five count indictment charging the defendants with violations of gambling, tax, and financial reporting laws, 18 U.S.C. §§ 1952 and 1955, 26 U.S.C. §§ 7201 and 7262, 31 U.S.C. §§ 5313 and 5322(b) and 31 C.F.R. § 103.22(a)(1). The investigation in this case included electronic surveillance, pursuant to a court order on an application submitted on November 16, 1984 by Justice Department attorney Robert E. Mydans. Government Exhibit 1-A. FBI Special Agent David L. Dirkse submitted the supporting affidavit. Government Exhibit 1-B. These documents named defendants Aaron Mosko, Barry Cohen, Phil Pinelli and "others as yet unknown" as interceptees. The government sought authority to intercept communications over nine telephone numbers, including a number subscribed to by Aaron Mosko's son, Martin Mosko, on the belief that Aaron Mosko sometimes used a call forwarding device to route his incoming calls to his son's telephone. See, Government Exhibit 1-B at ¶¶ 53, 69. Chief Judge Sherman G. Finesilver approved the requested interception of wire communications for a period of thirty days beginning November 16, 1984. Government Exhibit 1-C. No extensions of time were requested, and the wiretap order expired on December 16, 1984. On December 8, 1984, Special Agent Dirkse subscribed an affidavit for search warrants. Government Exhibit 2-A. This affidavit incorporated the affidavit in support of the wiretap, and included information obtained from the wire interceptions and the use of pen registers. Chief Judge Finesilver issued thirty-seven search warrants for the residences, businesses, persons and automobiles of all defendants except Robert Sheehan, as well as for non-defendant Benjamin Montoya. Government Exhibits 2-B to 2-LL. The government also obtained subscriber and toll record information concerning the defendants, and grand jury subpoenas of certain defendants' financial records. The defendants filed motions addressed to all of these investigative procedures, and evidentiary hearings were held before this court on August 27-28, 1986, and September 29, 1986. Motions to Suppress Evidence Obtained from Use of Pen Registers, Subscriber and Toll Records The defendants seek to suppress evidence obtained from the government's use of pen registers, contending that there was no showing of probable cause for the issuance of the orders authorizing them. Those orders were issued under the All Writs Act, 28 U.S.C. § 1651(a), and do not contain findings of probable cause. The protections of the Fourth Amendment do not extend to information obtained from pen registers. The Supreme Court has held that there is no legitimate expectation of privacy in the numbers dialed from a telephone. Smith v. Maryland, 442 U.S. 735, 741-743, 99 S.Ct. 2577, 2580-2581, 61 L.Ed.2d 220 (1979). See also, United States v. New York Telephone Co., 434 U.S. 159, 166-168, 98 S.Ct. 364, 369-370, 54 L.Ed.2d 376 (1977) (Title III restrictions do not apply to pen registers).[1] The defendants also argue that the pen register evidence should be suppressed because the applications and court orders failed to comply with Colorado case law holding that pen registers are a search within the meaning of the Colorado Constitution and therefore require a search warrant supported by probable cause. People v. Sporleder, 666 P.2d 135, 139-140 (Colo. 1983). This court has previously held that state law on this point is irrelevant to a 406 federal investigation and prosecution. United States v. Grabow, 621 F.Supp. 787, 794 (D.Colo.1985). The defendants' motions to suppress the subscriber and toll record information obtained by the government fail for the same reason. A telephone subscriber has no legitimate expectation of privacy in customer records kept by the telephone company. Nolan v. United States, 423 F.2d 1031, 1044 (10th Cir.1969), cert. denied, 400 U.S. 848, 91 S.Ct. 47, 27 L.Ed.2d 85 (1970), United States v. Grabow, 621 F.Supp. at 794. Motions to Suppress Evidence Financial Records Defendants Phil Pinelli and Ronald Pitts filed motions to suppress the use of financial records obtained by grand jury subpoenas, claiming alternatively that the records were not "presented" to the grand jury as required by section 3420 of the Right to Financial Privacy Act of 1978, 12 U.S.C. §§ 3401-3422, or that they were not presented until after the government had already used them to aid its investigation. Section 3420 states in pertinent part: Financial records about a customer obtained from a financial institution pursuant to a subpena issued under the authority of a Federal grand jury (1) shall be returned and actually presented to the grand jury.... The government does not dispute that financial records were obtained by the grand jury, and it does not argue that the records were properly presented. Instead, it relies on United States v. Frazin, 780 F.2d 1461 (9th Cir.), cert. denied, ___ U.S. ___, 107 S.Ct. 158, 93 L.Ed.2d 98 (1986), for the proposition that suppression is not a remedy for a § 3420 violation. In Frazin, the court found that the civil remedies set forth at § 3417(a) were the exclusive remedies for a violation of the Act. "Had Congress intended to authorize a suppression remedy, it surely would have included it among the remedies it expressly authorized [in § 3417(a)]". United States v. Frazin, 780 F.2d at 1466. The court also noted that § 3417(d) provides: "The remedies and sanctions described in this title shall be the only authorized judicial remedies and sanctions for violations of this title." This court finds the language of § 3417 and the reasoning in Frazin dispositive of this issue. Motions to Suppress Contents of Intercepted Wire Communications The defendants seek to suppress the contents of recorded wire interceptions conducted pursuant to Chief Judge Finesilver's order of November 16, 1984 on several grounds. A. Failure to Comply with 18 U.S.C. § 2518(1)(e) 18 U.S.C. § 2518(1)(e) requires that each application for a wiretap order include: [A] full and complete statement of the facts concerning all previous applications known to the individual authorizing and making the application, made to any judge for authorization to intercept, or for approval of interceptions of, wire or oral communications involving any of the same persons, facilities or places specified in the application, and the action taken by the judge on each such application. ... The defendants argue for suppression of intercepted communications based on the government's conceded failure to disclose to Chief Judge Finesilver that Phil Pinelli and George O'Brien were named as interceptees in a prior wiretap order. That order was issued on November 21, 1980 by Judge Robert Kelley of the Eighteenth Judicial District of the State of Colorado, and has throughout been referred to by the parties as the McNulty wiretap or McNulty investigation. The results of the McNulty wiretap were furnished to federal authorities and a federal indictment was returned. The evidence gathered in the McNulty wiretap was suppressed by the trial court in an order which was affirmed in a divided en banc decision of the Tenth Circuit Court of Appeals, United States v. 407 McNulty, 729 F.2d 1243 (10th Cir.1983), reh'g. en banc, 729 F.2d 1264 (1984). The majority opinion concluded that Judge Kelley's order was not authorized under Colorado's wiretapping statutes. Analysis of state law was necessary because "[T]he federal statute itself [18 U.S.C. § 2516(2)] requires our deference to Colorado law on the question of the validity of the wiretap order obtained in state court under state law." United States v. McNulty, 729 F.2d at 1266. The state-court wiretap order was held to be invalid under state law on the following basis: A wiretap order is only allowed for certain enumerated offenses. C.R.S. § 16-15-102(1)(a)(I)-(VIII). "Professional gambling", as defined by C.R.S. § 18-10-102(8), is one of the enumerated offenses. C.R.S. § 16-15-102(1)(a)(III). However, the statute also states that: Anything to the contrary notwithstanding, an ex parte order for wiretapping or eavesdropping may be issued only for a crime specified in this subsection (1) for which a felony penalty is authorized upon conviction. C.R.S. § 16-15-102(1)(b). "Professional gambling" is only a felony if the person is a "repeating gambling offender". C.R.S. § 18-10-103(2). A "repeating gambling offender" is [A]ny person who is convicted of an offense under section 18-10-103(2) or sections 18-10-105 to XX-XX-XXX within five years after a previous misdemeanor conviction under these sections ... or at any time after a previous felony conviction under any of the mentioned sections. C.R.S. XX-XX-XXX(9). The court in McNulty reasoned that since a wiretap is only allowed for offenses for which felony penalties are authorized; and since a felony penalty is only authorized for the offense of "professional gambling" if the person is a "repeating gambling offender"; and since a "repeating gambling offender" is someone convicted within five years of a previous misdemeanor gambling conviction or anytime after a previous felony gambling conviction, a wiretap order is only allowed under Colorado law when the named interceptee has two professional gambling convictions. Because none of the McNulty defendants was shown to have two such convictions, the evidence was suppressed. United States v. McNulty, 729 F.2d at 1266-1268. The government agents and lawyers working in this case made every effort to avoid any possible taint from the McNulty investigation. None of the suppressed McNulty wiretap information was included in the wiretap application and affidavit submitted to Chief Judge Finesilver. Different agents were assigned to this investigation and different attorneys are prosecuting it. The defendants' attempt to impute knowledge of the McNulty wiretap application to the government agents and attorneys assigned to this case is unpersuasive. The government's decision to erect a "Chinese Wall" between the two investigations explains the failure to list the McNulty wiretap application in the subject application. In United States v. Donovan, 429 U.S. 413, 97 S.Ct. 658, 50 L.Ed.2d 652 (1977), the Supreme Court held that violation of the statutory requirements in 18 U.S.C. §§ 2518(1)(b)(iv) and 2518(8)(d) did not require suppression of the evidence obtained by the interception. The Court repeated the view expressed in U.S. v. Chavez, 416 U.S. 562, 94 S.Ct. 1849, 40 L.Ed.2d 380 (1974), and U.S. v. Giordano, 416 U.S. 505, 94 S.Ct. 1820, 40 L.Ed.2d 341 (1974), that statutory Title III violations are only "unlawful" when the violated provisions "... directly and substantially implement the congressional intention to limit the use of intercept procedures to those situations clearly calling for ... this extraordinary investigative device", U.S. v. Giordano, 416 U.S. at 527, 94 S.Ct. at 1832, or to provisions which play a "substantive role" in the regulatory scheme, U.S. v. Chavez, 416 U.S. at 578, 94 S.Ct. at 1857. The Court concluded: Although [§§ 2518(1)(b)(iv) and 2518(8)(d)] are undoubtedly important, we do not think that the failure to comply 408 fully with these provisions renders unlawful an intercept order that in all other respects satisfies the statutory requirements. U.S. v. Donovan, 429 U.S. at 434, 97 S.Ct. at 671. The listing of all prior wiretap applications as required by § 2518(1)(e) may or may not play a substantive role in obtaining judicial authorization for an interception. The issue is fact specific. The statute allows the issuing judge to approve an interception upon the findings that 1) there is probable cause to believe that an individual is, has been, or is about to become engaged in activities proscribed by § 2516; 2) there is probable cause to believe that communications concerning the offense will be obtained by the interception; 3) normal investigative procedures have failed, appear likely to fail, or are too dangerous to try; and 4) there is probable cause to believe that the targeted premises or facilities are being used in connection with the specified activities. 18 U.S.C. § 2518(3)(a)-(d). The fact that the same persons may have been subject to prior intrusions or that earlier applications were rejected by other courts may influence the decision on any or all of these questions. It is clear to this court that the failure to list the McNulty application and consequent proceedings could have no relevance to Chief Judge Finesilver's determination of the adequacy of the showing made to him. The McNulty suppression order was based on a very restrictive reading of Colorado law. Inclusion of the information could have supported the government's application for this wiretap order. There is no evidence of any intentional wrongdoing by the government. See, United States v. Sullivan, 586 F.Supp. 1314, 1323 (D.Mass.1984). The principal purpose of the exclusionary rule is to deter unlawful police conduct. When suppression will not serve this purpose, the contribution of the exclusionary rule to the effectuation of the Fourth Amendment is minimal as compared to the societal costs of applying the rule. See, United States v. Leon, 468 U.S. 897, 907-908, 104 S.Ct. 3405, 3412, 82 L.Ed.2d 677 (1984), Stone v. Powell, 428 U.S. 465, 493-495, 96 S.Ct. 3037, 3051, 3052, 49 L.Ed.2d 1067, reh'g denied, 429 U.S. 874, 97 S.Ct. 197, 50 L.Ed.2d 158 (1976). This balancing approach dictates that the exclusionary rule should not be applied in this case since FBI Special Agent Dirkse made reasonable efforts to learn of any prior wiretap applications as to the named interceptees, and was unaware of the McNulty wiretap application. In United States v. Abramson, 553 F.2d 1164 (8th Cir.), cert. denied, 433 U.S. 911, 97 S.Ct. 2979, 53 L.Ed.2d 1095 (1977), the government disclosed a prior wiretap but failed to disclose that it had been suppressed. The court found noncompliance with § 2518(1)(e), but held that "... the failure to disclose the fact of suppression of the 1970 wiretap did not detract from the sufficiency of the enumerated factors necessary to a judge's wiretap authorization and hence was not central or functional in guarding against unwarranted use of wiretapping or electronic surveillance." United States v. Abramson, 553 F.2d at 1170. See also, United States v. Van Horn, 789 F.2d 1492, 1499-1500 (11th Cir.), cert. denied, ___ U.S. ___, 107 S.Ct. 190, 93 L.Ed.2d 123 (1986). United States v. Bellosi, 501 F.2d 833 (D.C.Cir.1974), on which defendants rely, did order suppression for an intentional violation of § 2518(1)(e). The court held that § 2518(1)(e) was one of the "... clearly worded `stringent conditions' with which a law enforcement agency must comply before conducting an interception of wire or oral communications." United States v. Bellosi, 501 F.2d at 840 (footnote omitted). However, Bellosi's value on this issue is minimal, in light of the Supreme Court's subsequent decision in Donovan. Defendants' reliance on United States v. Diltz, 622 F.2d 476 (10th Cir.1980), is misplaced. In Diltz the court found that there was no violation of 18 U.S.C. § 2518(1)(b)(iv) because there was no probable cause to name the defendant as an interceptee. 409 B. Failure to Serve Inventory Defendant Daniel Mordecai argues for suppression on the ground that the government failed to serve him with an inventory as required by 18 U.S.C. § 2518(8)(d). Based on the evidence and arguments before it, this court is unable to decide whether Mr. Mordecai was served with an inventory. The government submitted a photocopy of a signed mail receipt form, Exhibit F to Government's Second Consolidated Response, but there is no proof that the signature is Mr. Mordecai's, or that it acknowledges receipt of the inventory. This dispute is irrelevant, since Donovan clearly held that suppression is not the remedy for noncompliance with § 2518(8)(d). Moreover, defendants' reliance on State v. Dowdy, 222 Kan. 118, 563 P.2d 425 (1977) is misplaced. Dowdy is a Kansas state court case involving the constitutionality of that state's eavesdropping act. C. Motion to Suppress Intercepted Communications and All Evidence Derived Therefrom for Failure to Comply with Immediate Sealing Requirements of 18 U.S.C. § 2518(8)(a) The parties agree that four days passed between the expiration of Chief Judge Finesilver's order of November 16, 1984 authorizing wire interceptions and the sealing of the recordings made pursuant to that order. The defendants contend that the evidence seized in the intercepted communications should be suppressed because of that delay in the absence of a satisfactory explanation. 18 U.S.C. § 2518(8)(a) provides in pertinent part: Immediately upon the expiration of the period of the order ... [the] recordings shall be made available to the judge issuing such order and sealed under his directions. ... The presence of the seal provided for by this subsection, or a satisfactory explanation for the absence thereof, shall be a prerequisite for the use or disclosure of the contents of any wire or oral communication or evidence derived therefrom under subsection (3) of section 2517. None of the cases cited by Mr. Burbridge found suppression the proper remedy for a § 2518(8)(a) violation. In United States v. Vasquez, 605 F.2d 1269, 1278-1280 (2d Cir.), cert. denied, 444 U.S. 981, 100 S.Ct. 484, 62 L.Ed.2d 408 (1979), the court wrote that any delay beyond one or two days requires an explanation, but did not require suppression. United States v. Falcone, 505 F.2d 478, 483-484 (3rd Cir.1974), cert. denied, 420 U.S. 955, 95 S.Ct. 1339, 43 L.Ed.2d 432 (1975), held that the sealing requirement was not intended to limit the use of interception procedures, and therefore the failure promptly to seal does not render a communication "unlawfully intercepted" and does not require suppression under the statute. See also, United States v. Diana, 605 F.2d 1307, 1315-1316 (4th Cir.1979), cert. denied, 444 U.S. 1102, 100 S.Ct. 1067, 62 L.Ed.2d 787 (1980)(fact that defendant produced no evidence that tapes were altered or tampered with was important factor in decision to admit evidence). Although the Tenth Circuit has not ruled on this question, it has drawn a distinction between "... procedures governing the interception of wiretap evidence and those governing the preservation of such evidence after interception for trial...." United States v. McNulty, 729 F.2d at 1265 (emphasis in original). This distinction supports the conclusion that suppression is not the proper remedy for the failure immediately to seal intercepted recordings, at least where the government offers a satisfactory explanation. The government's explanation for the delay in this case appears in the affidavit of Robert Mydans, Exhibit C to Government's Second Consolidated Response to Defendants' Motions. Mr. Mydans explained that during 1984 he was assigned to a Department of Justice field office in Kansas City where he was on Saturday, December 15, 1984, when the wiretap order in this case expired. He states that he prepared the documents necessary to complete the sealing on Monday and Tuesday, December 17 410 and 18, 1984, then flew to Denver, where the sealing took place before Chief Judge Finesilver on Wednesday December 19, 1984. Mr. Mydans claims the multiple interceptions in this case required him to take "extra precautions" to be sure the documentation was in order prior to sealing. Mydans Affidavit at ¶¶ 3-7. This court is not unconcerned by the four day delay in sealing. The statute requires that the recordings be sealed "immediately." Nevertheless, courts have excused much longer delays than this when the government could offer a satisfactory explanation. See, e.g., United States v. Diana, 605 F.2d at 1315 (39 day delay excused), United States v. Lawson, 545 F.2d 557, 564 (7th Cir.1975) (evidence admissible despite 57 day delay where defendants did not question integrity of tapes). The explanation offered here is satisfactory. D. Motions to Suppress Based on Improper Unsealing of Intercepted Recordings The defendants moved to suppress the tape recordings of intercepted wire communications on the ground that they were improperly unsealed. Shortly after the February 5, 1986 indictment in this case, the government applied for an order unsealing the tapes, because the tapes were necessary "... to prepare for trial and provide the required discovery to the defendants." Exhibit D to Government's Second Consolidated Response, at ¶ 2. Chief Judge Finesilver granted this request by order of March 5, 1986. The order called for the boxes of tapes to be unsealed by FBI agents in the court's presence, and required the unsealed reels to remain in FBI custody. § 2518(8)(a), on which defendants rely, does not forbid unsealing intercepted wire communications. Defendants offer no case supporting their argument. They do not suggest that the unsealing failed to comply with the court order. Moreover, one stated purpose for unsealing the tapes was to allow the defendants to examine the original tapes for evidence of tampering or alteration. There is no merit to this motion. E. Motion to Suppress Intercepted Communications and All Fruits Thereof The defendants contend that the wiretap application was not authorized by the Department of Justice. They attack the continued validity of Attorney General Order No. 931-81, signed by then Attorney General Benjamin Civiletti on January 19, 1981. Order No. 931-81 specially designated the Assistant Attorney General in charge of the Criminal Division of the Justice Department to authorize applications for interception of wire and oral communications. See, 18 U.S.C. § 2516(1). The authorization to apply for interception in this case was signed by Stephen S. Trott, Assistant Attorney General in charge of the Criminal Division. In his memorandum authorizing the application, Mr. Trott stated that his power to authorize the application came from Order No. 931-81. The defendants argue that Order No. 931-81 expired a reasonable time after Mr. Civiletti left office on January 20, 1981. Order 931-81 empowered the Assistant Attorney General in charge of the Criminal Division to authorize wiretap applications. The clear weight of the law holds that "... designation by job title rather than the name of the individual currently holding the position meets the requirements of the Act." United States v. Bynum, 763 F.2d 474, 475 (1st Cir.1985). Designation by job title does not undermine the statutory intent to limit the power to authorize wiretaps to those "responsive to the political process" and "accountable to the courts and the public for their actions". United States v. Giordano, 416 U.S. at 520, 522, fn 10, 94 S.Ct. at 1829, fn 10. See also, United States v. Kerr, 711 F.2d 149, 151 (10th Cir.1983), United States v. Orozco, 630 F.Supp. 1418, 1533 (S.D.Cal.1986). Moreover, a wiretap authorization order is presumptively valid, United States v. Newman, 733 F.2d 1395, 1398 (10th Cir.1984), and a designation which contains no expiration date continues in effect until revoked, United States v. Lawson, 780 F.2d 535, 539 (6th Cir.1985), United States v. Bynum, 411 763 F.2d at 475, United States v. Kerr, 711 F.2d at 150-151. F. Bernard Jansen's § 2518(1)(b)(iv) Argument Defendant Bernard Jansen contends that there was probable cause to name him as an interceptee, and that the failure to do so is a basis for suppression of the wiretap evidence against him. In Donovan, the Supreme Court held that "... a wiretap application must name an individual if the Government has probable cause to believe that the individual is engaged in the criminal activity under investigation and expects to intercept the individual's conversations over the target telephone." United States v. Donovan, 429 U.S. at 428, 97 S.Ct. at 668. However, the Court in Donovan also held that the failure to meet this requirement does not require suppression of the evidence produced. Id. at 435-436, 97 S.Ct. at 671-672. It is therefore unnecessary to decide whether probable cause existed to list Mr. Jansen as an interceptee. Even if it did, the wiretap evidence against him would not be suppressed on this ground. Accord: United States v. Santarpio, 560 F.2d 448, 454, fn. 5 (1st Cir.), cert. denied, 434 U.S. 984, 98 S.Ct. 609, 54 L.Ed.2d 478 (1977); United States v. Sklaroff, 552 F.2d 1156, 1158-1159 (5th Cir.), reh'g denied, 555 F.2d 1391 (1977), cert. denied, 434 U.S. 1009, 98 S.Ct. 718, 54 L.Ed.2d 751 (1978). G. Lack of Probable Cause Defendants move to suppress the contents of the intercepted communications on the ground that the application for interception and supporting affidavit fail to establish probable cause for the findings required by 18 U.S.C. § 2518(3)(a)-(d). Section 2518(3) authorizes the judge to approve a wire or oral interception upon the findings that: (a) there is probable cause for belief that an individual is committing, has committed, or is about to commit a particular offense enumerated in section 2516 of this chapter; (b) there is probable cause for belief that particular communications concerning that offense will be obtained through such interception; (c) normal investigative procedures have been tried and failed or reasonably appear to be unlikely to succeed if tried or to be too dangerous; (d) there is probable cause for belief that the facilities from which, or the place where, the wire or oral communications are to be intercepted are being used, or are about to be used, in connection with the commission of such offense, or are leased to, listed in the name of, or commonly used by such person. The standard for evaluating a finding of probable cause is the totality of the circumstances test of Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). The determinations of Chief Judge Finesilver in this case are entitled to deference. United States v. Belcastro, 84-CR-290 slip op. at 6 (D.Colo. Feb. 5, 1985) (Judge Moore) [Available on WESTLAW, DCTU database]. Special Agent Dirkse's affidavit contained information gathered from confidential informants, physical surveillance, pen registers, and subscriber and toll record information. Taken as a whole, this court finds that the affidavit supports a finding of probable cause as to all the statutory elements. Probable cause to believe a gambling business existed is supported by physical surveillance of certain key defendants, confidential informant information, and pen register records showing hundreds of telephone calls to sports score and line information numbers. The belief that communications concerning a gambling operation would be intercepted is supported by pen register records and the affiant's experience that "... in a bookmaking business of any size, the operation usually utilizes telephones for the purpose of conveying gambling information, i.e., bets from bettors to the bookmakers." Government Exhibit 1-B at ¶ 4. This kind of experiential conclusion is fully consistent with the probable cause analysis. See, Illiois v. Gates, 462 412 U.S. at 230-232, 103 S.Ct. at 2328-2329. Pen register records, confidential informant information and physical surveillance also support Chief Judge Finesilver's probable cause finding that the phones to be intercepted were being used in connection with the offense. The defendants attack the wiretap order on the contention that the affidavit does not include the full and complete statement required by § 2518(1)(c) necessary to the judge's finding under § 2518(3)(c). This argument has no merit. Paragraphs 59-65 all speak to the need for wire interceptions in lieu of normal investigative procedures. Paragraph 59 states that the confidential informants would not be willing to testify out of fear of harm, and that revealing their identities would interfere with other ongoing investigations. Paragraph 60 states that physical surveillance proved difficult because the subjects are extremely conscious of being watched and because the location of certain key individuals' homes makes it "impossible" to watch these homes without being spotted. See also, paragraphs 23, 26, 30. Paragraph 60 also states that infiltration would be unlikely to succeed, and in any case would not identify all participants due to the nature of the alleged conspiracy. Paragraphs 62-63 state that because bookmakers do not, in the affiant's experience, keep permanent records, searches and seizures are unlikely to net sufficient evidence to prove the elements of the crimes under investigation. In United States v. Johnson, 645 F.2d 865, (10th Cir.), cert. denied, 454 U.S. 866, 102 S.Ct. 329, 70 L.Ed.2d 168 (1981), the court held that: The provisions of 18 U.S.C. § 2518(1)(c) are not designed to force the government to exhaust all other conceivable investigative procedures before resorting to wiretapping. Rather, that section of the statute serves to insure that wiretapping is not used in situations where traditional investigative techniques would suffice to expose the crime. United States v. Johnson, 645 F.2d at 867. See also, United States v. Grabow, 621 F.Supp. at 794-795. The defendants further maintain that the wiretap evidence should be suppressed because the affidavit fails to establish probable cause that "five or more persons" were involved in an illegal gambling business which remained in substantially continuous operation for over thirty days or grossed two thousand dollars in a single day. 18 U.S.C. § 1955. In United States v. Smaldone, 485 F.2d 1333 (10th Cir.1973), cert. denied, 416 U.S. 936, 94 S.Ct. 1934, 40 L.Ed.2d 286 reh'g denied, 417 U.S. 926, 94 S.Ct. 2635, 41 L.Ed.2d 230 (1974), the court held: It was not essential, contrary to appellants' assertions, to establish that each conductor was involved in the gambling business for more than thirty days or generated at least $2000 gross revenue in a single day. These requirements refer to the gambling operation and not to individuals. And the five individual participants necessary to sustain a federal conviction need not carry on or cause the entire gambling operation to function. United States v. Smaldone, 485 F.2d at 1351 (citations omitted). Physical surveillance revealed that Aaron Mosko "varied his route to work almost daily" and "customarily drives through parking lots, shopping centers, and alleys without stopping." Government Exhibit 1-B at ¶¶ 26-27. Physical surveillance also revealed Mr. Mosko meeting and passing envelopes to Phil Pinelli, David Pinelli and Bernard Jansen. Id. at ¶ 31. Bernard Jansen in turn was observed making numerous short stops at different locations. Pen register records show telephone calls from Barry Cohen to Aaron Mosko. Id. at ¶ 52(m). Pen register records also show that calls to Aaron Mosko are sometimes forwarded to the telephone of Martin Mosko. Id. at ¶¶ 53, 69. Confidential informant information links Aaron Mosko to non-defendants Tito Soto, Richard Schultz, Benjamin Montoya, Allen Reisman, and William Young, as well as to defendant 413 Thomas Gottone. Id. at ¶¶ 14, 15, 18, 19(a)(b) & (c), 20(a). See, United States v. Quarry, 576 F.2d 830, 833 (10th Cir.1978) (Congress intended to include all participants in an illegal gambling business within the definition of "persons" in § 1955(b)(1)(ii), irrespective of their status as defendants). Taken as a whole, Illinois v. Gates, supra, this court finds that the affidavit shows probable cause to believe that at least five persons were involved in an illegal gambling operation. This probable cause standard should not be confused with the requirement that a conviction be based on guilt beyond a reasonable doubt. See, United States v. Dorfman, 542 F.Supp. 345, 359 (N.D.Ill.1982), aff'd sub nom. United States v. Williams, 737 F.2d 594 (7th Cir.1984). The defendants further argue that Aaron Mosko is only linked to Benjamin Montoya, Allen Reisman, William Young and Thomas Gottone by allegations of lay-off bets. Citing United States v. Thomas, 508 F.2d 1200 (8th Cir.), cert. denied, 421 U.S. 947, 95 S.Ct. 1677, 44 L.Ed.2d 100 (1975), the defendants contend that lay-off betting must be substantial and systematic to fall within § 1955. Thomas, however, merely states that "... isolated and casual lay off bets and an occasional exchange of line information may not be sufficient to establish that one bookmaker is conducting or financing the business of a second bookmaker." United States v. Thomas, 508 F.2d at 1206. In United States v. Morris, 612 F.2d 483 (10th Cir.1979), this circuit wrote: [I]t is not necessary that lay-off betting be a two-way street in order to bring two bookmakers together in an illegal gambling business. Thus, without being financially interested in the business in the sense of participating directly in its profits, a bookmaker may still place lay-off bets with others which makes them conductors of his business as insurers. United States v. Morris, 612 F.2d at 493 (citations omitted). Defendant Robert Sheehan moves to suppress the contents of intercepted wire communications on the ground that the wiretap affidavit fails to support a finding of probable cause that he violated any of the offenses proscribed by 18 U.S.C. § 2516. Since Mr. Sheehan was not mentioned in the affidavit, either as an interceptee or a committor, it was not necessary to find probable cause as to him. H. 18 U.S.C. §§ 2518(1)(b), 2518(4), and 2518(5) The defendants have not shown a violation of any of these statutory requirements. The application meets the requirements of 18 U.S.C. § 2518(1)(b). The order authorizing interception satisfies 18 U.S.C. § 2518(4). There is no evidence of a violation of the requirement that the government minimize the interception of communications not subject to interception. 18 U.S.C. § 2518(5). Even if a violation of one of these sections were established, suppression would not be the automatic remedy under Donovan. Franks v. Delaware The defendants request further evidentiary inquiry under Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), and move for leave to file Franks submissions. They assert that 1) Agent Dirkse's affidavit in support of the wiretap application contains material misstatements and omissions, made intentionally or with reckless disregard for the truth, the deletion of which disestablishes probable cause; and 2) "the `full and complete' statement required by § 2518(1)(c) which attributes to certain confidential informants their refusal to testify or otherwise be disclosed for fear of reprisals is inaccurate and misleading." Motion to Suppress Contents of Intercepted Wire Communications at ¶¶ 5-6. The defendants also cite Franks for the argument that paragraph 9(e) of Special Agent Dirkse's affidavit in support of the wiretap application should be stricken. That paragraph informed that this investigation coupled with a 1977 state investigation 414 of the Pinelli brothers led Agent John Dore of the Denver Police Department to believe that Aaron Mosko "is still exchanging layoff bets with Tom Gottone and Phil Pinelli." The paragraph failed to state that the 1977 state investigation led to an indictment but ended in a court-ordered judgment of acquittal at the close of the state's evidence. In Franks, the Supreme Court held that the Fourth Amendment requires a hearing if the defendant makes a "... substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause...." Franks v. Delaware, 438 U.S. at 155-156, 98 S.Ct. at 2676. If at the hearing the defendant establishes by a preponderance of the evidence that there was perjury or a reckless disregard of the truth, and if the affidavit without the false material cannot support a finding of probable cause, the warrant must be voided. The parties do not dispute the applicability of the Franks doctrine to the order authorizing electronic surveillance. The Court in Franks established the following guidelines for deciding whether a hearing is warranted: [T]he challenger's attack must be more than conclusory and must be supported by more than a mere desire to cross-examine. There must be allegations of deliberate falsehood or of reckless disregard for the truth, and those allegations must be accompanied by an offer of proof. They should point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained. Allegations of negligence or innocent mistake are insufficient. ... Finally, if these requirements are met, and if, when material that is the subject of the alleged falsity or reckless disregard is set to one side, there remains sufficient content in the warrant affidavit to support a finding of probable cause, no hearing is required. Franks v. Delaware, 438 U.S. at 171-172, 98 S.Ct. at 2684. The defendants have not made the "substantial preliminary showing" necessary to gain a Franks hearing. The fact that a judge in 1978 found that the prosecution had failed to submit adequate evidence to support a jury verdict of guilty has little bearing on the probable cause finding challenged here. Inserting the omitted information into paragraph 9(e) would not affect the finding of probable cause. Moreover, paragraph 9(e) states that Agent Dore's beliefs about Aaron Mosko's gambling activities are based on this investigation as well as the 1977 investigation, and the government's failure to convict Aaron Mosko in the 1978 state prosecution arising out of the 1977 state investigation is suggested by the statement in paragraph 8 of the wiretap affidavit that Aaron Mosko has no known felony convictions. Probable Cause Searches Having concluded that the wiretaps in this case were lawfully authorized, this court rejects all contentions that the evidence obtained in the consequent searches must be suppressed as the fruit of the poisonous tree. Furthermore, this court finds and concludes that the search warrants signed by Chief Judge Finesilver for the residences, businesses, persons and automobiles of the defendants were fully supported by probable cause. Special Agent Dirkse's affidavit supporting the warrant applications provides a substantial basis for the conclusion that under the totality of the circumstances a search would reveal evidence of criminal activity. Illinois v. Gates, supra. Defendants' other attacks on the search warrants and supporting affidavit must also fail. The information in the affidavit was not stale. It was adequately based on the affiant's first-hand knowledge. Sufficient indicia of trustworthiness were provided for the confidential informants. The warrants were *415 not general or exploratory. The searches did not exceed the scope of the warrants. The failure to tender the search warrant contemporaneously with the search, even if established, does not require suppression of evidence obtained in that search. Motions to Suppress Evidence Obtained as a Consequence of Intensified Investigation Subsequent to Title III Surveillance The defendants contend that because the wire interception was unlawful, any evidence subsequently obtained was also unlawful. Citing United States v. Schipani, 414 F.2d 1262 (2d Cir.1969), cert. denied, 397 U.S. 922, 90 S.Ct. 902, 25 L.Ed.2d 102 (1970), they argue that this basis for suppression should extend to witnesses discovered by unlawful means. It is this court's view that the wire interceptions and searches in this case were lawful. Therefore, these motions are without merit. Ronald Pitts' Motion to Dismiss or to Suppress Defendant Ronald Pitts moves to dismiss or suppress on the grounds that federal and local law enforcement agents exceeded the scope of their search warrant by answering Mr. Pitts' telephone during the search of his home. The motion does not otherwise challenge the validity of the search warrant. Mr. Pitts correctly notes that the warrant in question, Government Exhibit 2-N, makes no mention of his telephone in its list of items to be seized. However, he fails to offer any case where this fact carried any legal significance. Numerous cases have held contrary to the defendant's position. In United States v. Gallo, 659 F.2d 110 (9th Cir.1981), the defendant attacked the trial court's decision to admit evidence obtained by answering the defendant's phone while lawfully on the premises pursuant to a warrant to search for evidence of bookmaking activities. The appellate court affirmed, reasoning that because the telephone is a likely source of evidence of a bookmaking operation, it was reasonably related to the purposes of the search. United States v. Gallo, 659 F.2d at 114. In United States v. Passarella, 788 F.2d 377 (6th Cir.1986), the police answered the defendant's telephone while lawfully in his home pursuant to an arrest warrant. The evidence gathered by answering the telephone was used to convict the defendant at trial. On appeal, the court held that there is no expectation of privacy in the words uttered by another. United States v. Passarella, 788 F.2d at 379-380. See also, United States v. Kane, 450 F.2d 77, 85 (5th Cir.1971), cert. denied, 405 U.S. 934, 92 S.Ct. 954, 30 L.Ed.2d 810 (1972) (Evidence not described in valid search warrant but having nexus with crime under investigation may be seized during search). Mr. Pitts attempts to distinguish these cases on two grounds: first, that in this case the government knew the defendant had a telephone yet failed to include it in the warrant, and second, that the defendant's lawyer allegedly requested that the agents stop answering the phone. Even if true, these facts are insufficient to distinguish the cited cases. Upon the foregoing, it is ORDERED, the defendants' motions to suppress are denied, and it is FURTHER ORDERED, a status conference on this matter, at which the defendants need not be present, will be held on Friday, March 6, 1987, at 1:00 p.m., in Courtroom A, Second Floor, Post Office Building, 18th and Stout Streets (use 19th Street Entrance), Denver, Colorado. NOTES [1] Title 18 of the United States Code was recently amended to provide that the installation and use of a pen register requires a court order. Such orders may not issue without certification by the government that the information likely to be obtained is relevant to an ongoing criminal investigation. 18 U.S.C. §§ 3121 and 3123. This amendment has no retroactive effect, and is not applicable to this case. P.L. 99-508, Sec. 302.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1778733/	726 So. 2d 93 (1998) Charles Sylvester BELL v. STATE of Mississippi. No. 96-CA-00191-SCT. Supreme Court of Mississippi. March 12, 1998. Rehearing Denied June 11, 1998. Charles Sylvester Bell, Parchman, Appellant, pro se. Michael C. Moore, Atty. Gen., Jackson, Jo Anne M. McLeod, Special Asst. Atty. Gen., for Appellee. BEFORE PRATHER, P.J., JAMES L. ROBERTS, Jr. AND MILLS, JJ. MILLS, Justice, for the Court: ¶ 1. Charles Sylvester Bell appealed pro se to this Court following the February 1996 denial of his motion for post conviction relief by the Circuit Court of Forrest County, Mississippi. ¶ 2. The appeal presently before us is the latest in a long line of Court proceedings and cases dealing with Charles Sylvester Bell. Mr. Bell is presently serving two consecutive life sentences for separate capital murder convictions and one sentence of twenty-five (25) years as an habitual offender. The known facts of Mr. Bell's life of crime are well documented. See Bell v. State, 353 So. 2d 1141 (Miss.1977); Bell v. State, 360 So. 2d 1206 (Miss.1978); and Bell v. Watkins, 692 F.2d 999 (5th Cir.1982), cert. denied, 464 U.S. 843, 104 S. Ct. 142, 78 L. Ed. 2d 134 (1983). FACTS ¶ 3. In March of 1984, Bell was indicted as an habitual offender for unlawfully, willfully and feloniously, with malice aforethought, killing and murdering one D.C. Haden while engaged in the commission of the crimes of armed robbery and kidnapping in violation of Section 97-3-19(2)(e) of the Mississippi Code of 1972, as amended. The crime occurred on June 22, 1976. Section 99-19-81 of the Mississippi Code of 1972, providing for the sentencing of habitual criminals to maximum terms of imprisonment, was enacted by the 1976 Legislature, effective from and after January 1, 1977. ¶ 4. Bell's original death sentence was overturned by the Fifth Circuit Court of Appeals in 1982. See Bell v. Watkins, 692 F.2d 999 (5th Cir.1982). Following the overturning of his death sentence, Bell was re-indicted for armed robbery as an habitual offender in July of 1984. He entered a plea 94 of guilty to armed robbery as an habitual offender. The State recommended life imprisonment, rather than the death penalty, for his capital murder conviction. The trial court accepted this recommendation and sentenced Bell to life imprisonment for the capital murder and twenty-five (25) years for the armed robbery. Bell has continuously, over the years, attempted to bring before this Court his contention that the trial court committed reversible error in sentencing him for armed robbery, arguing that this sentence constituted a double jeopardy violation since armed robbery was the underlying felony used to elevate the killing to capital murder. This issue is not germane to the present proceedings. However, our own review of the record indicates that Bell may have a valid claim that the ex post facto provisions of the United States and Mississippi Constitutions bar his sentence for armed robbery as an habitual offender. ISSUE Whether the ex-post facto provisions of Article 1, Section 10 of the United States Constitution and Article 3, Section 16 of the Mississippi Constitution bar the sentencing of Bell as an habitual offender? ¶ 5. The crimes for which Bell was indicted in the present appeal occurred on June 22, 1976. The Mississippi Legislature enacted the "habitual criminal statute," Section 99-19-81 of the Mississippi Code of 1972 in the 1976 session of the legislature, but effective from and after January 1, 1977. Bell was indicted and pled guilty to armed robbery as an habitual offender in 1984. The statute was not in existence at the time Bell committed his offense. ¶ 6. Article I, Section X of the U.S. Constitution prohibits States from enacting any ex post facto law. Our Constitution likewise, in Article 3, Section 16, states as follows: Ex post facto laws, or laws impairing the obligation of contracts, shall not be passed. ¶ 7. In common parlance an ex post facto law is one which creates a new offense or changes the punishment, to the detriment of the accused, after the commission of a crime. ¶ 8. The United States Supreme Court established the test for determining whether criminal enactments violate ex post facto guarantees in Collins v. Youngblood, 497 U.S. 37, 110 S. Ct. 2715, 111 L. Ed. 2d 30, (1990). In Collins, the U.S. Supreme Court criticized prior jurisprudence which attempted to distinguish between "procedural" changes as opposed to changes affecting "matters of substance". The Collins majority dictates that the following questions be answered in determining whether a new law violates ex post facto protections: 1) Does the act punish as a crime an act previously committed, which was innocent when done; 2) Does the act make more burdensome the punishment for a crime, after its commission; or 3) Does the act deprive one charged with crime of any defense available at the time when the act was committed? United States v. Brechtel, 997 F.2d 1108, 1113 (5th Cir.1993). ¶ 9. Concisely stated, Bell was indicted with enhanced penalties in 1984, under a 1977 statute, for a crime which occurred in 1976. Thus, the punishment he received as an habitual offender made more burdensome the punishment for his crimes, after commission, thereby violating the ex post facto provisions of our State and Federal Constitutions. ¶ 10. However, Bell may have waived his ex post facto claim to avoid receiving the death penalty. A defendant may knowingly and voluntarily waive an ex post facto claim in plea negotiations. Lanier v. State, 635 So. 2d 813 (Miss.1994). Bell was initially convicted of capital murder committed during armed robbery and sentenced to death. Bell v. State, 360 So. 2d 1206 (Miss.1978). The Fifth Circuit reversed and remanded the case concluding that the sentencing procedure used by the jury was "standardless and unchanneled imposition of [the death penalty] in the uncontrolled discretion of a basically uninstructed jury." Bell v. Watkins, 692 F.2d 999, 1011 (5th Cir.1982), cert. denied 464 U.S. 843, 104 S. Ct. 142, 78 L. Ed. 2d 134 (1983)(quoting Jordan v. Thigpen, 688 F.2d 95 395, 397 (5th Cir.1982)). The Fifth Circuit noted that on remand Bell could again be exposed to the death penalty. Id. at 1012. ¶ 11. Upon remand, Bell was re-indicted for armed robbery as an habitual offender. He entered a plea of guilty and the State recommended life imprisonment, instead of the death penalty, for the murder conviction and twenty-five years for the armed robbery. The trial court accepted the recommendations and found that Bell was, in fact, an habitual offender. The application of the habitual offender statute constitutes an ex post facto violation, but we must consider the plea bargain agreement. Bell knew that the State was indicting him as an habitual offender. He was probably also aware that the murder was committed before the enactment of the habitual offender statute. It is therefore highly probable that the State, knowing that Bell had an ex post facto claim, agreed not to seek the death penalty in exchange for his guilty plea to armed robbery as an habitual offender. The record is unclear regarding these matters. We therefore remand this matter to the trial court to determine whether Bell knowingly waived his ex post facto rights. ¶ 12 REVERSED AND REMANDED. PRATHER, C.J., and BANKS, JAMES L. ROBERTS, Jr. and SMITH, JJ., concur. McRAE, J., dissents with separate written opinion joined by SULLIVAN, P.J. PITTMAN, P.J., and WALLER, J., not participating. McRAE, Justice, dissenting: ¶ 13. I am compelled to dissent. ¶ 14. While I agree with the majority that Bell was indicted and punished in violation of the ex post facto provisions of our state and federal constitutions, I do not agree with the remand of this case for a determination of whether Bell waived this claim. The United States and Mississippi Constitutions forbid the enactment of any statute which increases the quantum of punishment for a crime after its commission. Since the crime for which Bell was indicted occurred before January 1, 1977, the date Miss.Code Ann. § 99-19-81 became effective, the application of the sentencing enhancement statute constitutes an ex post facto law. See Johnston v. State, 618 So. 2d 90, 95 (Miss.1993) (finding violation of Ex Post Facto Clause where enhancement statute for habitual offenders was applied to crime that occurred before statute came into existence). In effect, Bell was charged under a law that was not in existence. As a result, the indictment against him as an habitual offender was null and void. Accordingly, his conviction as an habitual offender should be reversed. ¶ 15. I also object to the majority's characterizations of what Bell "probably" knew in this case. The majority states that Bell knew that he was being indicted as an habitual offender and that he probably knew that the murder was committed before the enactment of the habitual offender statute. The majority is speculating, for there is nothing in the record to substantiate what the majority claims. We cannot read the mind of the defendant and guess what he allegedly knew at the time of his plea bargain. Further, the majority postulates that the State, knowing that Bell had a valid ex post facto claim, arranged for a guilty plea in exchange for a promise not to seek the death penalty. However, in the same breath, the majority declares, "The record is unclear regarding these matters." If the record is unclear, the majority should simply say so rather than imply that certain assumptions are fact. This Court should be basing its decision only on what is in the record, not on probabilities. Finally, the majority does not provide any instructions as to how the lower court should determine whether or not Bell waived his ex post facto claim. ¶ 16. It is for these reasons that I dissent. SULLIVAN, P.J., joins this opinion.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1781362/	751 So. 2d 1035 (1999) Charles Sylvester BELL v. STATE of Mississippi. No. 1998-CP-01128-SCT. Supreme Court of Mississippi. December 16, 1999. Rehearing Denied March 2, 2000. 1036 Charles Sylvester Bell, Appellant, pro se. Office of the Attorney General by Charles W. Maris, Jr., Attorney for Appellee. BEFORE PRATHER, C.J., BANKS AND McRAE, JJ. BANKS, Justice, for the Court: ¶ 1. This matter is before the Court on appeal from the denial of Charles Sylvester Bell's motion for post-conviction relief by the Circuit Court of Forrest County, Mississippi. Because Bell knowingly waived his double jeopardy and ex post facto rights, we affirm. I. ¶ 2. Charles Sylvester Bell appealed pro se to this Court following the February 1996 denial of his motion for post-conviction relief by the Circuit Court of Forrest County, Mississippi. Bell is presently serving two consecutive life sentences for separate capital murder convictions and one sentence of twenty-five (25) years as an habitual offender. This is the fourth time this Court has reviewed Bell's case. Bell v. State, 726 So. 2d 93 (Miss.1998); Bell v. State, 353 So. 2d 1141 (Miss.1977); Bell v. State, 360 So. 2d 1206 (Miss.1978); see also Bell v. Watkins, 692 F.2d 999 (5th Cir.1982), cert. denied sub. nom. Bell v. Thigpen, 464 U.S. 843, 104 S. Ct. 142, 78 L. Ed. 2d 134 (1983). Now, Bell appeals pro se to this Court following an order entered by the Forrest County Circuit Court denying post-conviction relief. ¶ 3. In March of 1977, Bell was indicted for capital murder for killing D.C. Haden while engaged in the commission of the crimes of armed robbery and kidnapping in violation of Section 97-3-19(2)(e) of the Mississippi Code of 1972, as amended. The crime occurred on June 22, 1976. Miss.Code Ann. § 99-19-81(1994) providing for the sentencing of habitual criminals to maximum terms of imprisonment, was enacted by the 1976 Legislature, effective from and after January 1, 1977. ¶ 4. Bell was convicted of capital murder and sentenced to death. Ultimately, Bell's death sentence was overturned by the United States Court of Appeals for the Fifth Circuit in 1982. See Bell v. Watkins, 692 F.2d 999 (5th Cir.1982). Following the overturning of his death sentence, Bell was re-indicted for armed robbery as an habitual offender in July of 1984. On August 9, 1984, Bell entered a plea of guilty to armed robbery as an habitual offender. The State recommended life imprisonment, rather than the death penalty, for his capital murder conviction. The trial court accepted this recommendation and sentenced Bell to life imprisonment for the capital murder and twenty-five (25) years for the armed robbery. Bell appealed to this Court following the denial of his motion for post-conviction relief by the Circuit Court of Forrest County, Mississippi. ¶ 5. On March 12, 1998, this Court remanded this case to the circuit court to determine whether Bell knowingly waived his ex post facto rights in the August 9, 1984, plea of guilty. On July 10, 1998, after conducting a hearing on remand, the circuit court held that Bell did knowingly waive his ex post facto rights when he pled guilty to armed robbery as an habitual offender. Bell now appeals that order entered by the Forrest County Circuit Court denying post-conviction relief. II. ¶ 6. We must determine whether the lower court erred in denying to reverse Bell's conviction for the ex post facto violation. This Court in Bell v. State, 726 So. 2d 93, 95 (Miss.1998), remanded this case to the lower court to determine the limited issue of whether Bell knowingly waived his ex post facto rights when he pled guilty to armed robbery as an habitual offender. ¶ 7. In reviewing a trial court's decision to deny a petition for post-conviction relief, this Court will not reverse absent 1037 clear error. State v. Tokman, 564 So. 2d 1339, 1341 (Miss.1990). A defendant may knowingly and voluntarily waive an ex post facto claim in plea negotiations. Lanier v. State, 635 So. 2d 813 (Miss.1994). ¶ 8. On remand from this Court, the lower court held a hearing, at which it heard testimony from Bell and Glenn White, who was the District Attorney at the time of Bell's plea. Bell stated that he did not know he was waiving his ex post facto rights when he pled guilty. White stated that Bell's plea to armed robbery as an habitual offender was knowingly made and was a part of a plea bargain to avoid a possible death penalty sentence. On remand from this Court, the lower court ruled that Bell had knowingly waived his rights based on the testimony given in the evidentiary hearing and a review of a transcript of the guilty plea. Accordingly, both the guilty plea transcript and the hearing transcript should be reviewed to determine if there is substantial evidence to support the lower court's findings. ¶ 9. The guilty plea transcript reflects the following information. On March 19, 1985, at the same time Bell pled guilty to the armed robbery as an habitual offender, the trial court was also re-sentencing Bell for his 1976 conviction of capital murder, which was remanded from the United States Court of Appeals. Bell v. Watkins, 692 F.2d 999 (5th Cir.1982). The Fifth Circuit remanded this case to the trial court to conduct a new sentencing proceeding or to impose a sentence less than death. Id. The Fifth Circuit noted that on remand Bell could again be exposed to the death penalty. Id. at 1012. Then District Attorney Glenn White had a motion before that court to empanel a jury to determine whether Bell should be sentenced to death or life in prison. White, as a part of the plea bargain for the crime of armed robbery as an habitual offender, asked the court to set aside the State's motion and asked the court to impose a sentence of life under the guidelines as enunciated by the Fifth Circuit. The lower court thoroughly questioned Bell as to his desire to plead guilty to armed robbery as an habitual offender. The court consistently explained to Bell that he was pleading guilty to the crime of armed robbery as an "habitual offender." Although the transcript of that plea proceeding does not reflect that anyone informed Bell of his ex post facto rights in particular, Bell's attorneys, all three of them, asserted that they had informed Bell of all of his constitutional and statutory rights. In concluding that plea proceeding, the court stated as follows: By the Court: In view of the comments and facts in this particular matter and further in view of the fact that this individual has been adjudicated as a Habitual Criminaland I want to be absolutely certain in my mind, Charles Sylvester Bellit's already been noted here by your very eminent attorney, Mr. Hollimanare you aware of the fact, sir, that for all intensive [sic] purposes that this means that you will serve the remainder of your natural life in the Penitentiary, are you aware of that? By Charles Sylvester Bell: Yes, sir. We find that the guilty plea transcript supports the lower court's findings. ¶ 10. At the evidentiary hearing on remand testimony was given by White, represented by Assistant District Attorney Rex Jones, and Bell, who represented himself. White testified that he conferred with Bell's three attorneys about Bell waiving his ex post facto rights. White testified that Bell's attorneys indicated that Bell would waive any and all rights in order to effectuate this particular plea agreement, including his ex post facto rights. White stated that Bell was specifically made aware of the fact that he was being sentenced under the habitual criminal act and would be ineligible for parole. ¶ 11. We find that the testimony heard by the lower court supports its findings. *1038 Bell's attorneys were specifically aware of the ex post facto claims. They stated that they advised him of all of his constitutional rights. The incentive to waive the ex post fact claim, the prospect of a death sentence, was present. ¶ 12. Accordingly, we find that the lower court's determination that Bell knowingly waived his ex post facto rights was not error and is supported by substantial evidence. III. ¶ 13. Bell argues that he received ineffective assistance of counsel when his attorneys advised him to plead guilty to armed robbery, which Bell contends is barred by the constitutional provisions of double jeopardy. ¶ 14. When reviewing claims of ineffective assistance of counsel, this Court utilizes the standard set forth in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984). This Court, in Schmitt v. State, 560 So. 2d 148, 154 (Miss. 1990), has held that "before counsel can be deemed to have been ineffective, it must be shown (1) that counsel's performance was deficient and (2) that the defendant was prejudiced by counsel's mistakes." The defendant claiming ineffective assistance of counsel must show, by a preponderance of the evidence, that there is a reasonable probability that had counsel's assistance been effective, he would not have pled guilty, but would have insisted on going to trial. Schmitt v. State, 560 So.2d at 161. One who claims that counsel was ineffective must overcome the presumption that "counsel's performance falls within the range of reasonable professional assistance." Id. at 154. To overcome this presumption, the defendant must show that "there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Id. (quoting Strickland, 466 U.S. at 694, 104 S. Ct. 2052). ¶ 15. Bell's claim must be viewed in light of the fact that we clearly have a plea bargain to avoid the death penalty. There is simply no evidence that this claim, like the ex post facto claim was not waived in order to avoid a second sentence of death. ¶ 16. Additionally, this claim was raised in 1984. It was rejected by the trial court and Bell failed to prosecute his appeal resulting in dismissal. The claim is therefore procedurally barred by Miss.Code Ann. § 99-39-21 (1994). IV. ¶ 17. We hold that the lower court's findings are supported by the record and should be upheld. Accordingly, the judgment of the Forrest County Circuit Court is affirmed. ¶ 18. DENIAL OF POST CONVICTION RELIEF IS AFFIRMED. PRATHER, C.J., SULLIVAN, P.J., McRAE, SMITH, MILLS, WALLER AND COBB, JJ., CONCUR. PITTMAN, P.J., NOT PARTICIPATING.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1878878/	784 So. 2d 911 (2001) PEARL PUBLIC SCHOOL DISTRICT v. Rita GRONER. No. 1999-CA-02027-SCT. Supreme Court of Mississippi. April 19, 2001. 913 Arthur F. Jernigan, Jr., Ronald Henry Pierce, Oxford, Attorneys for Appellant. Michael P. Younger, Brandon, Attorney For Appellee. BEFORE BANKS, P.J., SMITH and MILLS, JJ. SMITH, Justice, for the Court: ¶ 1. This case had its genesis in February of 1996 when a fight occurred at a Pearl Public School ("the District") basketball game and Rita Groner ("Groner") was injured. In July of 1996, Groner filed a complaint against the District. Following a non-jury trial, the trial court entered its findings of fact and conclusions of law in favor of Groner and against the District in the amount of $45,000. Judgment was entered accordingly. The District filed its Notice of Appeal on December 7, 1999. I. ¶ 2. Rita Groner is a long time supporter of Pearl High School. She and her husband frequently attended athletic events at the school. On February 6, 1996, Groner and her husband attended a basketball game between Pearl and Brandon that was being held in the Pearl High School gymnasium. ¶ 3. At the beginning of each school year, the Mississippi High School Activities Association requires each school to submit a security plan. The plan requires that two security officers be present at each sporting event. A copy of this security plan was not made part of the record. On the night of February 6, 1996, only one officer arrived for duty. Officer Jeffrey Williams, the attending officer, informed his reserve commander that he was the only officer at the school. Officer Williams made a judgment call that a second officer was not necessary. He testified that "everything looked pretty normal at that time." According to Dr. William Dodson, superintendent of the schools, it was the responsibility of the reserve officer to insure that the security plan was implemented. ¶ 4. Officer Williams was standing inside the gymnasium next to the basketball court when a fight broke out. According to Groner, the fight happened "in a blink of an eye." There was no evidence leading up to the fight that would have given any indication of trouble. Officer Williams testified that, even if a second officer had been present, the incident could not have been prevented. ¶ 5. During the fight, Groner was thrown from the stands onto the gymnasium floor. She sustained injuries to her fingers, hand, and wrist. Due to her injury, Groner has been through extensive physical therapy. She has two fingers that "don't work." Also, there is no rotation in her wrist. Groner testified that, according to her doctor, two future surgeries are necessary. ¶ 6. The trial court awarded a judgment in favor of Groner and against Pearl Public School District in the amount of $45,000. Pearl Public School District filed its Notice of Appeal on December 7, 1999. Finding that the trial court made no determination on ordinary care, we reverse and remand. II. ¶ 7. The question of law before this Court is whether Pearl Public School District is immune from liability under the Mississippi Tort Claims Act ("MTCA"), Miss.Code Ann. §§ 11-46-1 to 23 (Supp. 2000). This Court's review of questions of law is de novo, and we will reverse for erroneous interpretation or applications of the law. Bank of Miss. v. Hollingsworth, 609 So. 2d 422, 424 (Miss.1992)(citing Harrison 914 County v. City of Gulfport, 557 So. 2d 780, 784 (Miss.1990)). III. ¶ 8. The first issue presented to this Court is whether the trial court erred in denying Pearl Public School District's Motion for a Directed Verdict pursuant to Miss.Code Ann. § 11-46-9? The Mississippi Tort Claims Act provides the exclusive civil remedy against governmental entities and employees for acts and omissions that give rise to suit. Miss.Code Ann. § 11-46-7(1). The District argues that pursuant to Miss.Code Ann. § 11-46-9(1)(d), (1)(g), and (1)(u) it is statutorily exempt from Groner's claims. Section 11-46-9 states that "a governmental entity and its employees acting within the course and scope of their employment or duties shall not be liable for any claim based upon an act or omission enumerated therein." Lang v. Bay St. Louis/Waveland Sch. Dist., 764 So. 2d 1234, 1237 (Miss.1999). Miss.Code Ann. § 11-46-9(1)(d) ¶ 9. Miss.Code Ann. § 11-46-9(1)(d) provides that a governmental entity and its employees will be exempt from liability: . . . . (d) Based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a governmental entity or employee thereof, whether or not the discretion be abused. Miss.Code Ann. § 11-46-9(1)(d). ¶ 10. The United States Supreme Court has stated that if there is room for policy judgments and decision making, there is discretion. Dalehite v. United States, 346 U.S. 15, 73 S. Ct. 956, 97 L.Ed. 1427(1953). Similarly, this Court has held that "[a] duty is discretionary if it requires [an] official to use her own judgment and discretion in the performance thereof." L.W. v. McComb Separate Mun. Sch. Dist., 754 So. 2d 1136, 1141 (Miss.1999) (citing T.M. v. Noblitt, 650 So. 2d 1340, 1346 (Miss.1995)). Discretionary conduct alone is not an absolute bar to liability. Id. at 1141. When conduct is found to be discretionary, a determination of ordinary care must then be made before the statutory bar is raised. ¶ 11. In contrast, an act is ministerial if it is positively imposed by law and if the performance of the conditions imposed are not dependent on an officer's judgment or discretion. L.W., 754 So.2d at 1141 (citing Davis v. Little, 362 So. 2d 642, 644 (Miss.1978)). ¶ 12. A factually similar case was presented to a Michigan court in 1989. In Giddings v. City of Detroit, 178 Mich.App. 749, 444 N.W.2d 242 (1989), the plaintiff, a volunteer teacher, was attacked and raped at a high school. She filed suit against the City, the Board of Education, the superintendent, the principal, the head of security and the security guards. The claim against the security guards was that they failed to follow or implement security procedures. There was no proof that the security guards acted in a supervisory or a decision-making role. The court held that the activities of school security guards were ministerial and did not entail discretionary decision making. "Although the task of patrolling the school may involve some decision-making, the essence of their tasks appears to have been the execution of decisions and to have involved only minor decision-making." They were therefore not entitled to governmental immunity from liability. ¶ 13. In a case recently before this Court, a school district was subjected to a negligence action when an altercation occurred on school property. Lang v. Bay St. Louis/Waveland Sch. Dist., 764 So. 2d 1234 (Miss.1999). A student was injured 915 while "scrambling" off a wall in order to avoid a fight between other students. Id. at 1235. In that case, the trial court held that "[s]ince there is no statutory requirement that a school district provide security on school premises, the court finds as a matter of law that any duty to do so requires the exercise and judgment of the school district." Id. at 1236. For that reason, the trial court held that the duty was discretionary. Id. When the case reached this Court, we held that school administrators and teachers are required, by statute, to hold students in strict account for disorderly conduct at school. Id. at 1241. For this reason, the school district's duty was ministerial and not discretionary. ¶ 14. More recently this issue was discussed in L.W. v. McComb Separate Mun. Sch. Dist., 754 So. 2d 1136 (Miss.1999). In L.W., this Court held that public schools have a responsibility to provide a safe environment for students; therefore, ordinary care and reasonable steps must be taken to minimize risk to students. Id. at 1143-45. In other words, ordinary care must have been used before a school can use the statutory shield for immunity. Id. The issue of ordinary care is a fact question that should be decided in the trial court. Id. at 1142. This Court reversed and remanded L.W. to the trial court for a determination of whether ordinary care was used. Id. at 1143. ¶ 15. The Mississippi High School Activities Association regulates and provides guidelines for the schools to follow. It required, as part of its regulations, that Pearl High School provide a security plan for each athletic event. This was not a requirement that was imposed by statute; however, it was a regulation set up by the Mississippi High School Activities Association. The governing statute, Miss. Code Ann. § 37-9-69 (1996), refers to "statutes, rules and regulations." We do not find that the duty turns upon the issue of whether the function was discretionary or ministerial. Instead, L.W. stands for the proposition that the school district has a duty of ordinary care with respect to providing a safe environment for its patrons. ¶ 16. Miss.Code Ann. § 37-9-69 provides: It shall be the duty of each superintendent, principal and teacher in the public schools of this state to enforce in the schools the courses of study prescribed by law or by the state board of education, to comply with the law in distribution and use of free textbooks, and to observe and enforce the statutes, rules and regulations prescribed for the operation of schools. Such superintendents, principals and teachers shall hold the pupils to strict account for disorderly conduct at school, on the way to and from school, on the playgrounds, and during recess. Miss.Code Ann. § 37-9-69. Also, under Miss.Code Ann. § 37-13-91 our state requires that all children be enrolled in school. For this reason, this Court held in L.W. that it would only seem "logical" that ordinary care be required in administering our schools. L.W., 754 So.2d at 1142. ¶ 17. "[B]oth state and federal law support our conclusion that public schools have the responsibility to use ordinary care and take reasonable steps to minimize risks to students thereby providing a safe school environment." Id. at 1141. As earlier stated, the issue of ordinary care is a question of fact. "The trial court, confronted with all the relevant facts, should then under our law, decide whether or not those responsible used ordinary care as required by the statute." Id. at 1142. 916 ¶ 18. The trial court judge made no reference to ordinary care in his findings of fact and conclusions of law. For this reason, this case must be remanded to the trial court for a factual determination on ordinary care. IV. ¶ 19. The second issue raised by the District is whether the trial court erred in failing to establish fault between all potentially responsible persons, especially the individuals who actually caused the civil disturbance? Miss.Code Ann. § 37-9-69 states that schools shall hold students to strict account for disorderly conduct at school. The statute requires that school personnel maintain control and discipline over students while they are at school. L.W., 754 So.2d at 1142. ¶ 20. The District alleges that the amount of damages should have been apportioned among all potentially responsible parties. We agree. On the other hand, apportionment is an affirmative defense that must be pled and proven. This Court has held that "[i]t is fundamental that the burden of proof of affirmative defenses rests squarely on the shoulders of the one who expects to avoid liability by that defense." Marshall Durbin Cos. v. Warren, 633 So. 2d 1006, 1009 (Miss.1994). The trial court erred in failing to apply apportionment among all responsible parties. On remand the trial court should determine the issue of apportionment based upon the proof already in the record to the extent that any of these other tort feasors is deemed to have been negligent thereby contributing to Groner's injury and damages. V. ¶ 21. Lastly, the District argues that the trial court erred by failing to grant the District credit for amounts paid to Groner under the medical pay provisions of its insurance policy. Amounts that are disbursed by a defendant's insurance company to an injured claimant may be credited against the amount of damages which the claimant is entitled to recover. Daves v. Reed, 222 So. 2d 411, 416 (Miss. 1969). This Court has reasoned that payments from the defendant's insurance company are not coming from a collateral source, but from the defendant. Id. "A person who has been prudent enough to pay insurance to protect a particular class of persons from a certain hazard should be able to use the proceeds of that coverage to reduce the damages he is required to pay." Id. This is consistent with the theory that injured parties should not be allowed double recovery. Id. ¶ 22. In the case sub judice, the evidence supports the conclusion that the circuit court judge did take the medical pay provisions into account in his judgment. The maximum cap on damages was $50,000. The verdict in favor of Groner was $45,000. The District's insurance company paid Groner $4,880 under its medical pay provision. It appears to this Court that the total amount of damages was, in fact, reduced by the amount that had already been paid. Therefore, the judgment was for $45,000 instead of $50,000. The District actually received a benefit in the amount of $120.00 because the circuit court judge could have returned a verdict for $45,120.00. For this reason, the claim of the District alleging that the insurance money was not credited to the verdict is without merit. CONCLUSION ¶ 23. The Mississippi High School Activities Association did provide regulations for a security plan and the officer exceeded his authority when he decided only one security guard was needed. For this reason, 917 this case is reversed and remanded to the circuit court for a determination on ordinary care and for further findings consistent with this opinion. ¶ 24. REVERSED AND REMANDED. PITTMAN, C.J., BANKS, P.J., MILLS, WALLER, COBB and EASLEY, JJ., CONCUR. McRAE, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY DIAZ, J. McRAE, Presiding Justice, Dissenting: ¶ 25. The Pearl Public School District was under an affirmative duty to provide two armed security guards for each basketball game, and the district may not delegate its responsibility to a third party. The security guard present on the night in question lacked the authority to deviate from the security plan, and his duty was therefore ministerial in nature. The circuit court's finding that his actions fell below that of a reasonable person was based on substantial evidence, and I would therefore affirm the trial court's judgment. Accordingly, I dissent. ¶ 26. The majority remands this case to the circuit court "for a factual determination on ordinary care." However, the chancellor specifically found that ordinary care under the facts at bar would require more than one security guard, stating that "there have been past instances of fights and/or altercations during Brandon Pearl sporting events and this rivalry alone would have been cause to have more security rather than less security." ¶ 27. The court went on to find that this fight originated from an altercation earlier in the day, and that Rita Groner's injuries "would have been preventable had the school followed its own security plan and had the school's agent patrolled the stands as common sense would dictate that he should have." Though not employing the particular words "ordinary care," the circuit court found that the security guard's actions fell below that of a reasonably prudent person. The test for liability in negligence actions has been defined in Mississippi as "what a reasonably prudent person would ordinarily have done in such a situation." Jefferson v. Denkmann Lumber Co., 167 Miss. 246, 148 So. 237, 239 (1933). ¶ 28. While the record does not include the full text of the security plan, the record shows that the Mississippi High School Activities Association regulates all high school sporting events, and requires school districts to submit annual security plans prior to each school year. It is undisputed that in 1996 the plan for the Pearl school district mandated that at least two armed security guards must not only be present at basketball games, but must also be visible and patrolling the stands at all times. Common sense and good police procedures tell one that if the officers are visible, violence is far less likely to occur. ¶ 29. In the case at bar, Jeffrey Williams made the decision to not bring in a second guard, as was required by the security plan. This decision was not authorized by his position in the school system. As a security guard, Williams lacked discretion to decide whether to follow the security plan. His job required that he carry out the plan as it was written. The decision to deviate from it was not within his discretion. Miss.Code Ann. § 37-9-69 (1996) requires the superintendent, principal, and teachers "to observe and enforce the statutes, rules and regulations prescribed for the operation of schools." The school district was negligent in allowing only one security guard and should be accountable, which is what the trial court found in this case. 918 ¶ 30. In addition, the school charges a fee for the public to attend these events. In Quinn v. Mississippi State Univ., 720 So. 2d 843 (Miss.1998), we held that the defense of governmental immunity was not available to the university in a suit based on breach of contract. The Quinns paid an admission fee to the university to enroll their son in a baseball camp. In that case we held as follows: By doing so, they entered into an implied contract with the university. This contract carried with it the implied promise that the university would provide a safe instructional environment for the campers attending the baseball camp. This Court holds that when Brandon was hit in the mouth with the bat, the university breached its contract with the Quinns. Id. at 850. ¶ 31. Likewise, in Churchill v. Pearl River Basin Dev. Dist., 619 So. 2d 900, 903 (Miss.1993), we held that the payment of an admission fee to a water park created an implied contract that the premises were safe for water sports. Though the defendant was a political subdivision, we held that the defense of governmental immunity does not apply to actions brought on a breach of contract theory. Id. We then allowed Churchill to seek recovery up to the limits of the liability insurance policy. ¶ 32. Rita Groner presumably paid for admission into the basketball game and was, therefore, entitled to presume that the school would provide a safe facility. This is an athletic activity in which the school charges admission fees and makes a profit. It should not be allowed immunity for this. ¶ 33. I also write to stress that the holding in Daves v. Reed, 222 So. 2d 411, 416 (Miss.1969), only applies to liability insurance policies that were purchased by the tortfeasor. In Daves, we held that when a defendant purchases liability insurance, medical benefits paid to the plaintiff may be credited against the verdict. Daves should not be interpreted to alter the collateral source doctrine, and it so stated. ¶ 34. Also, the Daves case was a negligence suit between private citizens, and was not brought under the Mississippi Tort Claims Act. As a result, instead of deducting insurance benefits from the verdict, the insurance payments should be added to the maximum verdict allowed under the MTCA. Since this case was brought under the MTCA and the school district has insurance, immunity is further waived up to the amount of insurance. ¶ 35. Miss.Code Ann. § 11-46-5(1) (Supp.2000) waives immunity for negligent acts or omissions up to the maximum amount of liability provided for in section 11-46-15. Section 11-46-15(1)(a) limits the government's liability to $50,000 for negligent acts or omission occurring between July 1, 1993, and July 1, 1997. ¶ 36. Seemingly in contrast with these provisions, Miss.Code Ann. § 11-46-17(2) (Supp.2000) states the following: "If liability coverage, either through insurance policies or self-insurance retention is in effect, immunity from suit shall be waived only to the limit of liability established by such insurance or self-insurance program." That section further states: "However, this shall not limit any cause of action against such political subdivision relative to limits of liability under the Tort Claims Act." Miss.Code Ann. § 11-46-17(3) (Supp.2000) (emphasis added). ¶ 37. In other words, insurance waives immunity up to the policy limits, while at the same time not limiting the recovery available under section 11-46-15(1)(a). Therefore, Groner should be able to recover up to the amount provided for in section *919 11-46-15, in addition to amounts paid by the insurance policy pursuant to section 11-46-17. While the record does not contain the insurance policy purchased by the school board, it does show that the policy contained a "med pay" provision to pay up to $5,000 to injured victims without regard for fault. The trial court could therefore have awarded Groner up to $55,000. ¶ 38. I must also disagree with the majority's decision to order the trial court to "determine the issue of apportionment based upon the proof already in the record to the extent that these other tortfeasors are deemed to have been negligent." Apportionment is an affirmative defense that must be pled pursuant to M.R.C.P. 8(c), and the defendant bears the burden of proof. Mississippi Tank Co. v. Dependents of Walker, 187 So. 2d 590, 592 (Miss. 1966) (holding defense of apportionment to be waived due to the failure to plead it). The school district failed to plead this defense and did not even raise the issue until the close of the plaintiff's case, when it moved for directed verdict. ¶ 39. In addition, the record is completely devoid of any information regarding the identities of the individuals responsible for the fight that led to Groner's injuries. The closest the defense has come to identifying them is through the testimony of a basketball coach who testified that he was "given some names." The proof in the record is not even sufficient to identify these individuals, and is certainly inadequate to deem them negligent. The trial court therefore did not err in refusing to apportion fault, as the school district failed to plead the issue and failed to offer any proof regarding the apportionment liabilities or identities of these "phantom defendants." How is the complete and just compensation to be made if apportionment is applied to individuals who have not been identified, nor made parties to the suit? ¶ 40. The security plan devised by the school district and approved by the Mississippi High School Activities Association required two security guards to be present at basketball games and patrolling the stands. Security guards are charged with the duty of implementing the plan, but lack the authority to modify it. Therefore, the only discretionary function performed by security guard Jeffrey Williams on the night of February 6, 1996, was the negligent decision not to follow the security plan. The judgment of the circuit court was correct and should be affirmed. Accordingly, I dissent. DIAZ, J., joins this opinion.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1691397/	752 So. 2d 1036 (1999) Robert P. THEOBALD and Karleen D. Theobald v. Rusty NOSSER and Karen L. Nosser. No. 1998-CA-01274-SCT. Supreme Court of Mississippi. December 16, 1999. 1037 David M. Sessums, Vicksburg, Attorney for Appellants. William Allen Hood, A.J. `Buddy' Dees, Jr., W. Briggs Hopson, III, Vicksburg, Attorneys for Appellees. BEFORE PRATHER, C.J., BANKS AND McRAE, JJ. PRATHER, Chief Justice, for the Court: I. INTRODUCTION ¶ 1. This Court is asked to determine whether an improperly executed promissory 1038 note, coupled with the actions of the parties, gave rise to a contract for the sale of a grocery store. If a contract did exist, we must then determine if it was breached, and if so, what damages flowed from the breach. The Warren County Chancery Court found that the contract was valid and subsequently breached, and held that although each party was injured and suffered damages, their damages canceled each other out. This Court affirms on the existence of a contract, but reverses and renders on damages. II. FACTS Negotiations between the Parties ¶ 2. Robert and Karleen Theobald owned and operated the Eagle Lake Grocery and Deli (Grocery) located on Eagle Lake in Warren County, Mississippi. In early January, 1997, Robert Theobald entered into negotiations for the sale of the Grocery and agreed for Rusty Nosser and his wife, Karen, to buy the Grocery for $175,000. Although there is no disagreement that the purchase price was $175,000, there is disagreement over whether the purchase was contingent on the Nossers' ability to obtain suitable financing. The Theobalds argue that there was no such contingency, while the Nossers argue that the purchase was contingent upon the procurement of financing. ¶ 3. On February 28, 1997, a blank Promissory Note (Note) provided by Mr. Theobald was signed by Mr. and Mrs. Theobald and Mr. and Mrs. Nosser. The Note described the Grocery by title and physical address, stated that $175,000 was due the Theobalds on March 31, 1997, and stated that "[i]f this Note is not paid promptly in accordance with its terms, the Undersigned agrees to pay all costs of collection, including reasonable attorney fees." However, the Theobalds signed the Note as Maker and Co-Maker while the Nossers signed it as Guarantors. Mr. Nosser testified that the sole purpose of the Note was to have a document reflecting the agreed upon purchase price, so as to prevent a future dispute over said price. The Note makes no mention of the purchase being contingent upon the securing of financing by the Nossers, and at that point, neither party was being assisted by counsel in this matter. Actions of the Parties ¶ 4. Per their agreement, the Nossers took over the Grocery on March 1, 1997. At this time, Mr. Theobald closed his business bank account at Trustmark National Bank and surrendered his tax ID number, said ID number being the only means with which he could purchase inventory at wholesale prices. Meanwhile, Mr. Nosser changed the Grocery's name, opened a business account at the Bank of Mississippi under the new name, and changed the electricity over into his name, which required him to make a $1,675 deposit. Additionally, he rearranged the layout of the Grocery, gave away or destroyed some furnishings left behind by the Theobalds, and installed a new cash register, stereo and canopy of outdoor lights at a total expense of $1,851.86. Mr. Nosser did not ask for, nor did Mr. Theobald give, permission for any of these changes to be made, and the Note makes no mention of allowing any such changes. Additionally, it appears from the record that Mr. Theobald exercised no oversight over the operations of the Grocery while it was being run by Mr. Nosser. ¶ 5. Mr. Nosser unsuccessfully attempted to obtain financing from several different sources, and when the Note became due on March 31, 1997, he did not pay the Theobalds any money. Mr. Nosser applied for and received a $3,000 loan from the Bank of Mississippi on April 3, 1997, and soon thereafter paid the Theobalds a total of $5,000. Mr. Nosser testified that he was paying Mr. Theobald "for the use of the business," while Mr. Theobald testified that he never discussed renting the Grocery with Mr. Nosser. ¶ 6. On April 28, 1997, the Nossers permanently ceased their operation of the 1039 Grocery, and instructed their employee, Marsha Brewer, to deliver the key to the store to Mr. Theobald. However, Mr. Theobald refused to accept it. Mr. Nosser then sent Mr. Theobald a letter stating that he had vacated on April 28, and that the electricity would remain on until May 5, 1997. On May 13, 1997, the Theobalds sold the Grocery to Brenda Jacks for $160,000. At the time the Nossers vacated the Grocery, no deed or bill of sale on the inventory had been transferred to them, and the only written instrument between the parties was the Note which they signed. ¶ 7. No inventory was taken when the Nossers entered the Grocery on March 1, nor was any taken upon their exit on April 28. The only tangible evidence regarding inventory was presented when Mr. Nosser attempted to prove that the Grocery's inventory upon his departure was $9,440.58 greater than it was when he came into possession of the store. He reached this figure by subtracting the total cost of goods sold$35,984.16, from his total purchases of gas and food items$45,424.74. Damages sought by the Parties ¶ 8. The Theobalds are seeking to recover $10,000, this being the difference between the $175,000 amount in the Note, minus the $160,000 sale of the Grocery to Ms. Jacks and the $5,000 already paid by the Nossers to the Theobalds. They are also seeking to recover attorney fees in the amount of $3,966.50. Additionally, Mr. Theobald testified that he incurred the following incidental damages, totaling $6,503.10, because of the Nossers alleged breach: $200.00cleaning the store after the Nossers' departure $3,810.00the mortgage note on the store from March to May, 1997 $335.52pro-rated insurance on the store $90.90alarm service for April $234.50repair of a blown circuit in the store $200.00yard maintenance outside of the store $35.00service truck for gas and supplies $60.00contract labor for restocking $1,280.00replacement of spoiled products $66.29past due phone bill incurred but not paid for by the Nossers $190.89the cost of keeping the Grocery's electricity on from the time the Nossers vacated until the time the Theobalds sold the store to Ms. Jacks ¶ 9. Finally, the Theobalds are seeking to recover $1,783.65, representing three (3) months mortgage payments on their home. The Theobalds paid off their home mortgage with the proceeds from the May, 1997, sale of the Grocery to Ms. Jacks, and they argue that had the Nossers paid the amount due on the Note in a timely manner, the Theobalds would have paid their home mortgage off in March, not May. Therefore, the Theobalds argue that they incurred three (3) extra notes on their home, and they seek to recover the sum of those notes. ¶ 10. The Nossers seek damages under the theory that the Theobalds were unjustly enriched with the $9,440.58 worth of additional inventory as well as the $1,851.86 worth of improvements they made to and left in the Grocery. ¶ 11. As previously stated, Mr. Nosser paid Mr. Theobald $5,000 in early April, 1997, for what Mr. Nosser described as "the use of the store." Mr. Theobald paid the $1,270 monthly note on the Grocery in March and April 1997, said payments totaling $2,540. The Nossers are also seeking $2,460 damages, constituting the difference between $5,000 and $2,540, or, as they put it, "unused rent." ¶ 12. The chancery court held that there was a valid contract between the parties; the Nossers breached the contract; both parties sustained damages; the damages of each party offset the others; and each party was responsible for their own attorneys fees. Aggrieved by this judgment, both parties have appealed to this Court 1040 seeking relief. Judgment was entered accordingly. Although the parties have collectively raised eight (8) separate assignments of error, the issues before this Court can be summarized into two (2) categories: (1) was there a contract and breach thereof; (2) if so, what damages resulted from said breach? III. LEGAL ANALYSIS ¶ 13. In Mississippi, the standard of review for factual determinations made by a trial judge sitting without a jury is the substantial evidence standard. Hill v. Thompson, 564 So. 2d 1, 10 (Miss.1989). We will not disturb the findings of a chancellor when supported by substantial evidence unless the chancellor abused his discretion, was manifestly wrong, clearly erroneous or an erroneous legal standard was applied. Herring Gas Co. v. Whiddon, 616 So. 2d 892, 894 (Miss.1993). A. Was there a contract between the parties; and, if so, was it breached? ¶ 14. The Statute of Frauds dealing with the sale of land states, in pertinent part, "[a]n action shall not be brought whereby to charge a defendant or other party upon any contract for the sale of lands, tenements, or hereditaments ... unless, ... the promise or agreement upon which such action may be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith." Miss.Code Ann. § 15-3-1(c) 1972. (emphasis added). "Sale contract must describe land with reasonable certainty." Taylor v. Sayle, 163 Miss. 822, 140 So. 3 (1932). The Promissory Note will satisfy the Statute of Frauds as a "memorandum or note" of any agreement that the parties may have had, and because the Grocery is described both by name and physical address, the land is described with reasonable certainty. ¶ 15. "All that is needed to constitute a valid consideration to support an agreement or contract is that there must be either a benefit to the promissor or a detriment to the promisee. If either of these requirements exist, there is a sufficient consideration." American Olean Tile Co. v. Morton, 247 Miss. 886, 893, 157 So. 2d 788, 790 (1963). The Theobalds were promisees in the Note, and they gave up possession of the Grocery as well as the opportunity to sell it to other buyers. These actions are sufficient to constitute adequate consideration for the Note. ¶ 16. The Nossers argue that they should not be bound by the Note since they did not sign as makers. Although there appear to be no Mississippi cases addressing this issue, other jurisdictions have found this argument to be unpersuasive. The U.S. Court of Appeals for the Eighth Circuit held, in reference to the signature needed to satisfy a Statute of Frauds, that "[it] may take many forms and be located anywhere in the writing, so long as it conveys an intention to authenticate the writing." Vess Beverages, Inc. v. The Paddington Corp., 886 F.2d 208, 213 (8th Cir.1989). Similarly, the Michigan Supreme Court held "[t]he writing of his name at the top, in the body, or at the bottom of the instrument constitutes a sufficient signing or signature if it is written for the purpose of giving authenticity to the instrument." Borkowski v. Kolodziejski, 332 Mich. 589, 52 N.W.2d 348, 350 (1952) (quoting 49 Am.Jur. 681). These cases state that the intent of the parties, rather than the location of their signatures on an instrument, should be controlling. Because this is the proper inquiry in a situation such as the one at hand, we must now turn to the Note itself and from it, attempt to determine the intent of the Theobalds and Nossers. ¶ 17. "Where the intentions of the parties to an instrument appear clear and unambiguous from the instrument itself, the court should look solely to the instrument and give same effect as written." Barnett v. Getty Oil Co., 266 So. 2d 581, 586 (Miss.1972). "A construction 1041 leading to an absurd, harsh or unreasonable result in a contract should be avoided, unless the terms are express and free of doubt." Frazier v. Northeast Miss. Shopping Ctr., Inc., 458 So. 2d 1051, 1054 (Miss. 1984). Because the Theobalds signed the Note as Makers and the Nossers signed the Note as Guarantors, a literal reading of it would state as follows: "We, the Theobalds promise to pay ourselves $175,000 in order to purchase a store which we already own; and if we fail to pay ourselves, then the Nossers guarantee to pay us." Such a literal reading would obviously be absurd. [A]mbiguous words and terms should be construed against the party who has drafted them; and we accept that, in a case where language of an otherwise enforceable contract is subject to more than one fair reading, we will give that language the reading most favorable to the non-drafting party. Leach v. Tingle, 586 So. 2d 799, 801-02 (Miss.1991) (emphasis added). ¶ 18. The Nossers argue that construing this agreement against the Theobalds renders the Promissory Note contingent upon the Nossers' obtaining financing. This argument, however, has a significant shortcoming, as the Note in this case says nothing about the purchase being contingent on the securing of financing. Consequently, there is no language regarding financing that is "subject to more than one fair reading" which could be construed against the Theobalds. ¶ 19. "If ... a careful reading of the instrument reveals it to be less than clear, definite, explicit, harmonious in all its provisions, and free from ambiguity throughout, the court is obligated to pursue the intent of the parties, and, to determine the intent, must resort to extrinsic aid." Barnett, 266 So.2d at 586. As the Note is the only written instrument in the record regarding the purposed sale of the Grocery, the only probative extrinsic evidence remaining is the acts of the parties themselves. If, as the Nossers claim, the sale of the Grocery was contingent on their ability to obtain financing, then the Theobalds would have been aware of the possibility of them having to take back the store and immediately re-commencing operations. Assuming such circumstances to be true, then it is hard to believe that they would have closed their business bank account, given up their tax ID number (and their ability to buy food and gas at wholesale prices), and let the Nossers do whatever they wanted to the Grocery without their input or supervision. ¶ 20. Furthermore, it seems unlikely that the Nossers would have expended over $1,800 on fixtures which they would not have been able to recover had they been forced to vacate the Grocery for failure to complete the sale. Continuing under this same assumption, then it would seem logical to have included language in the Note stating things like the sale was contingent on financing, how much time the Nossers would have to attempt to obtain financing, and what "rent" would be owed to the Theobalds if the Nossers occupied the grocery for only a brief period of time. As mentioned above, no such language was included in the Note. Since Mr. Nosser thought to insert the description of the property in the Note, then it seems that he would have also thought to insert some "contingency upon financing" language, if that was truly his arrangement with Mr. Theobald. "[I]f a party who contemplates purchasing a piece of property wishes to protect himself against the possibility that he may be unable to secure financing adequate to make the purchase, it is incumbent upon that party to so provide by clear language in the contract." Osborne v. Bullins, 549 So. 2d 1337, 1339 (Miss.1989). "[I]n the absence of some provision in the contract authorizing termination or cancellation, every contract is presumed irrevocable." Warwick v. Matheney, 603 So. 2d 330, 336 (Miss.1992) (quoting 17A C.J.S. Contracts, § 397). The only act, or lack thereof, that might suggest that the sale of the Grocery was 1042 contingent on financing is that the Theobalds never deeded the Grocery to the Nossers. However, this is but one fact, and all of the parties' actions taken as a whole point to the conclusion that the sale of the Grocery was not contingent on the Nossers' ability to obtain financing. ¶ 21. Therefore, we affirm the Chancellor's holding that a valid, unconditional contract existed between the Theobalds and the Nossers, said contract having been breached by the Nossers when they failed to satisfy the Note on its due date, March 31, 1997. Having determined that a contract did exist and was breached, we must now examine what damages flowed from this breach. B. What damages are each of the parties entitled to because of the breach of the contract? ¶ 22. "The court's purpose in establishing a measure of damages for breach of contract is to put the injured party in the position where she would have been but for the breach." Leard v. Breland, 514 So. 2d 778, 782 (Miss.1987). "Contract damages are ordinarily based on the injured party's expectation interest and are intended to give him the benefit of the bargain by awarding him a sum of money that will, to the extent possible, put him in as good a position as he would have been in had the contract been performed." J.O. Hooker & Sons, Inc. v. Roberts Cabinet Co., 683 So. 2d 396, 405 (Miss.1996) (quoting 22 Am.Jur.2d Damages § 45). ¶ 23. In addressing damages, the chancery court held that both parties suffered damages, the damages of each party offset the others and each party was responsible for their attorney fees. ¶ 24. But for the Nossers' breach, the Theobalds would have received $175,000 for the sale of their Grocery. However, the Nossers did breach, and the Theobalds subsequently received only $160,000 for their Grocery. The Nossers have already paid $5,000 on the Note, and it will take another $10,000 to put the Theobalds in the same position in which they would have been absent a breach. Accordingly, the Theobalds are entitled to recover the $10,000 which they seek. ¶ 25. The Theobalds seek to recover their attorney fees of $3,966.50 from the Nossers under paragraph four (4) of the Note, which provides "[i]f this Note is not paid promptly in accordance with its terms, the Undersigned agrees to pay all costs of collection, including reasonable attorney fees." "Of course, parties may by contract provide that in event of dispute, the losing party must pay the winner attorney's fees." Grisham v. Hinton, 490 So. 2d 1201, 1206 (Miss.1986). The Nossers failed to dispute the reasonableness of the aforementioned attorney fees either at trial or in their brief to this Court, and absent objection, it must be assumed that said fees are reasonable. The chancery court apparently held that, notwithstanding paragraph four (4) of the Note, the Theobalds should pay their own attorney fees because "[t]his action was brought regarding the basic validity of the Note. This was a genuine factual issue which could not have been resolved without this Court's determination." No cases have been cited by either the Chancery court or the parties which support such a holding, and this Court has been unable to find any cases supporting such a position. As evidenced by Grisham, a clause in a contract such as the one in paragraph four (4) of our Note is certainly reasonable. However, enforcing this Note without enforcing the clause addressing attorney fees would be contrary to the law. Accordingly, the Theobalds are entitled to recover $3,966.50 in attorney fees. ¶ 26. The Theobalds claim that they incurred numerous costs once the Nossers vacated the Grocery totaling $6,503.10. The Theobalds assert that these expenditures were necessary in getting the Grocery ready for re-sale, and they included repairs, cleaning, restocking, payment of past due bills, and the notes on the store. The Chancellor awarded the 1043 Theobalds $2,358.60 worth of the afore-mentioned costs, declining to award the three (3) months worth of notes on the Grocery as well as the cost of replacing a circuit in the Grocery. Allowing the Theobalds to recover the three (3) months worth of notes as well as the sales proceeds from which those notes would have been paid would amount to double recovery; and therefore, the Chancellor was correct in not allowing said damages. Although it in not clear from the record why the Chancellor declined to award the cost of replacing the circuit in the Grocery, there is no substantial evidence pointing to the conclusion that such a ruling was manifest error. The Chancellor did, however, make a mathematical mistake in her computation of these damages. The Court allowed $100 in damages for yard maintenance outside of the store, when in fact, Mr. Theobald testified that he spent $100 on two (2) different occasions for said maintenance. Therefore, the Chancellor's award of $2,358.60 to the Theobalds for incidental damages shall be increased to $2,458.60. ¶ 27. Finally, the Theobalds are seeking to recover $1,783.65, this sum representing three (3) months worth of mortgage notes on their home. They paid off their home mortgage with the sale proceeds, and they claim that they were forced to make three (3) extra mortgage payments on their home because the Nossers did not pay the Grocery Store Promissory Note on time. However, they can not recover the three (3) months worth of home mortgage notes for the same reason that they can not recover the three (3) extra store notes. ¶ 28. Although there is credible evidence in the record that the Nossers added $9,440.58 worth of additional inventory and $1,851.86 worth of improvements to the Grocery, they are not entitled to recover these amounts as damages for unjust enrichment. Had the Nossers not increased the value of the Grocery by the aforementioned $11,292.44, it is reasonable to assume that Ms. Jacks would have paid approximately $11,292.44 less than what she actually paid when she bought the Grocery. In other words, the extra inventory and improvements were sold for part of the $160,000 paid by Ms. Jacks; therefore, the Nossers have already been compensated for the improvements they made to the Grocery, as this $160,000 has already been credited to them. ¶ 29. Additionally, the Nossers seek to recover $2,460, the difference in the $5,000 they paid the Theobalds in early April and $2,540, the total of the Grocery's mortgage notes which were paid by the Theobalds while the Nossers occupied the store. The Nossers claim that this $2,460 represents "unused rent" to which they are entitled to recover. However, the initial award of $10,000 to the Theobalds gives the Nossers full credit for the $5,000 that they paid the Theobalds in early April, 1997. Awarding the Nossers the $2,460 they now seek would amount to a double recovery, therefore, they are not entitled to said recovery. IV. CONCLUSION ¶ 30. We hold that there is substantial evidence supporting the Chancellor's finding that a non-contingent contract for the sale of the Eagle Lake Grocery and Deli existed between the Theobalds and Nossers, the Nossers having breached the contract with their failure to satisfy the Promissory Note on its due date. However, it was error for the Chancellor to hold that each sides' damages offset the others, and that the Theobalds were responsible for their attorney's fees. The Theobalds should be awarded a total of $16,425.10, consisting of (1) $10,000 to put them in the position they would have been in if there would have been no breach, (2) $3,966.50 attorney's fees, as provided for under the Note, and (3) $2,458.60 incidental damages incurred in preparing the Grocery for resale. Although the Nossers did make improvements to the Grocery while the operated it, they are not entitled to recover the value of said improvements, as the improvements were sold, along with the rest 1044 of the Grocery, for $160,000. For the foregoing reasons, we affirm in part and reverse and render in part the judgment of the Warren County Chancery Court, and remand this case back to said court for entry of judgment of $16,425.10 in favor of the Theobalds. ¶ 31. AFFIRMED IN PART, REVERSED, RENDERED, AND REMANDED IN PART. SULLIVAN AND PITTMAN, P.JJ., BANKS, McRAE, SMITH, MILLS, WALLER AND COBB, JJ., CONCUR.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2429594/	863 S.W.2d 489 (1993) Joe Louis THEUS, Appellant v. The STATE of Texas, Appellee. Nos. 971-93, 972-93. Court of Criminal Appeals of Texas, En Banc. October 20, 1993. 490 DeEdward J. Greer, Houston, for appellant. John B. Holmes, Jr., Dist. Atty., Linda A. West & Elsa Alcala, Asst. Dist. Attys., Houston, Robert Huttash, State's Atty., Austin, for the State. Before the court en banc. OPINION ON APPELLANT'S PETITION FOR DISCRETIONARY REVIEW PER CURIAM. Appellant was convicted by a jury of possession and delivery of less than twenty-eight grams of cocaine, enhanced by proof of one prior conviction, and sentenced by the court to concurrent thirty-five and twenty-five year terms of confinement. The Court of Appeals affirmed. Theus v. State, 816 S.W.2d 773 (Tex.App.Houston [14th] 1991). We reversed the conviction because of the erroneous introduction of a prior arson conviction during the guilt or innocence phase of trial, and remanded the case to the Court of Appeals for a harm analysis pursuant to Tex. R.App.Pro. 81(b)(2). Theus v. State, 845 S.W.2d 874 (Tex.Cr.App.1992). On remand, the Court of Appeals found the error harmless beyond a reasonable doubt. Theus v. State, 858 S.W.2d 25 (Tex.App.Houston [14th] 1993). Appellant is once again before this Court. In his third ground for review, appellant complains the Court of Appeals erred in failing to afford him the opportunity to file a brief after remand. He states that no notice was sent informing him of his right to file a brief, nor did the Court of Appeals inquire why none was filed. Tex.R.App.Pro. 74(l)(2).[1] The record supports this contention. 491 This Court has previously held that an indigent appellant is entitled to the assistance of appointed counsel in filing a brief on remand from this Court. Robinson v. State, 790 S.W.2d 334 (Tex.Cr.App.1990); Williams v. State, 790 S.W.2d 336 (Tex.Cr.App.1990). Although the Rules of Appellate Procedure do not specifically address procedures in the courts of appeals after remand, we opined that, because an appellant stands in the same position as he did when the initial appeal was filed, the appellate rules apply just as though the appeal were on original submission. Robinson, supra at 335; Williams, supra at 338. In the instant case, as in Robinson and Williams, the return of the record to the appellate court was equivalent to the filing of the transcript and statement of facts, giving counsel thirty days in which to file a brief on appellant's behalf. Tex.R.App.Pro. 74(k). When no brief had been timely filed, the Court of Appeals was obligated to inquire as to the reason for that omission. Tex.R.App.Pro. 74(l)(2). In the absence of any brief by counsel or inquiry by the appellate court it must be presumed that appellant was not represented by counsel.[2] Therefore, appellant's third ground for review is summarily granted. The judgment of the Court of Appeals is vacated, and the case is once again remanded to that court in order that appellant may file a brief after remand. Appellant's first and second grounds for review are dismissed without prejudice. NOTES [1] Rule 74(l) provides in pertinent part: (2) Criminal Cases. In criminal cases, appellant's failure to file a brief in the time prescribed shall not authorize dismissal of the appeal or, except as herein provided, consideration of the appeal without briefs. When the appellant's brief has not been filed within such time, the clerk of the appellate court shall notify counsel for the parties and the trial judge that appellant's brief has not been filed. If no satisfactory response is received within ten days, the appellate court shall order the judge to immediately conduct a hearing to determine whether the appellant desires to prosecute his appeal, whether the appellant is indigent, or if not indigent, whether retained counsel has abandoned the appeal, and to make appropriate findings and recommendations. For this purpose the trial judge shall conduct such hearings as may be necessary, make appropriate findings and recommendations, and prepare a record of the proceedings. If the appellant is indigent, the judge shall take such measures as may be necessary to assure effective representation of counsel, which may include the appointment of new counsel. The record so made, including any orders and findings of the trial judge, shall be sent to the appellate court, which may take appropriate action to insure that the appellant's rights are protected, including contempt proceedings against counsel. If the trial judge finds that the appellant no longer desires to prosecute the appeal, or that he is not indigent but has failed to make necessary arrangements for filing a brief, the appellate court may consider the appeal without briefs, as justice may require. (emphasis added) [2] Appellant asserts he was indigent and was represented by appointed counsel on appeal and after remand. However, Rule 74(l)(2) places the onus on the Court of Appeals to make inquiries as to whether counsel desires to file a brief.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2904038/	In The Court of Appeals Ninth District of Texas at Beaumont ____________________ NO. 09-00-481 CR ____________________ BRANDON LINN DUDLEY, Appellant V. THE STATE OF TEXAS, Appellee On Appeal from the Criminal District Court Jefferson County, Texas Trial Cause No. 80541 OPINION Beaumont police found Brandon Linn Dudley sitting in a car in possession of a styrofoam cup. When police sniffed the contents of the cup the smell of cough syrup was present. Laboratory testing later confirmed the presence of codeine in the liquid mixture contained in the cup. Dudley was indicted for possession of codeine as listed under Penalty Group 1 in the Health and Safety Code, in an amount of "four hundred (400) grams and more." See Tex. Health & Safety Code Ann. § 481.115(a), (f) (Vernon Supp. 2001). Prior to trial, the State moved to amend the indictment to charge Dudley with the entirely separate offense of possession of codeine as listed under Penalty Group 4 of the Health and Safety Code, in an amount of "four hundred (400) grams and more." See Tex. Health & Safety Code Ann. § 481.118(a), (e) (Vernon Supp. 2001). However, the jury convicted Dudley of having committed the lesser included offense of possession of codeine as listed in Penalty Group 4, in an amount of "200 grams or more but less than 400 grams." Dudley presents us with two appellate issues, the first of which complains of legally insufficient evidence contained in the record to support his conviction. Specifically, Dudley does not contest the sufficiency of the State's evidence regarding the quantity of the codeine found in the liquid mixture contained in the styrofoam cup, but does contest the legal sufficiency of the State's proof regarding the quality of the codeine found in the liquid mixture, as defined in Penalty Group 4. In other words, as we appreciate Dudley's appellate complaint, the definition of "codeine" as set out in Penalty Group 4, as opposed to the definition of "codeine" as set out in any of the other penalty groups, IS the controlled substance the State alleged he unlawfully possessed. As such, the State was required to prove Dudley possessed codeine as specifically defined in Penalty Group 4, because each penalty group set out in the Health and Safety Code contain entirely distinct and separate lists of contraband, each with its own distinct chemical make-up. While two or more penalty groups may include the same generic controlled substance, distinctions arise, for penalty group purposes, when a controlled substance is defined in one penalty group in its "pure" form, while defined in other penalty groups based upon certain other distinct qualitative properties. As does the Court of Criminal Appeals, this Court is bound to accept the legislative characterization or classification of prohibited substances regardless of how the scientific community view them. See Few v. State, 588 S.W.2d 578, 583 (Tex. Crim. App. 1979). It has been observed that within the provisions of the Health and Safety Code, different controlled substances are deemed to constitute varying degrees of harm to society in their illicit uses, so differing punishments are authorized for the illicit use of the various controlled substances. See Chalin v. State, 645 S.W.2d 265, 272 (Tex. Crim. App. 1982) ("When the Commissioner of Health classified phentermine by name within Schedule IV, phentermine was determined to be less harmful than the general class of isomers of methamphetamine listed in Schedule II.") In that light, the legislature apparently intended to place codeine into three of the four penalty groups based upon particular qualitative properties. Codeine's existence as a controlled substance is specifically defined in each penalty group in which it appears as follows: Penalty Group 1: (2) the following opium derivatives, their salts, isomers, and salts of isomers, unless specifically excepted, if the existence of these salts, isomers, and salts of isomers is possible within the specific chemical designation: . . . Codeine methylbromide; Codeine-N-Oxide; . . . . (3) the following substances, however produced, except those narcotic drugs listed in another group: Codeine not listed in Penalty Group 3 or 4; . . . . (1) Penalty Group 3: (4) a material, compound, mixture, or preparation containing limited quantities of the following narcotic drugs, or any of their salts: not more than 1.8 grams of codeine, or any if its salts, per 100 milliliters or not more than 90 milligrams per dosage unit, with an equal or greater quantity of an isoquinoline alkaloid of opium; not more than 1.8 grams of codeine, or any of its salts, per 100 milliliters or not more than 90 milligrams per dosage unit, with one or more active, nonnarcotic ingredients in recognized therapeutic amounts; . . . . (2) Penalty Group 4: (1) a compound, mixture, or preparation containing limited quantities of any of the following narcotic drugs that includes one or more nonnarcotic active medicinal ingredients in sufficient proportion to confer on the compound, mixture, or preparation valuable medicinal qualities other than those possessed by the narcotic drug alone: not more than 200 milligrams of codeine per 100 milliliters or per 100 grams; . . . . (3) We agree, therefore, with the portion of appellant's argument that, having pleaded possession of codeine "listed in Penalty Group 4 of the Texas Controlled Substances Act," the State was obligated to elicit evidence sufficient to prove Dudley's possession of codeine as specifically defined under section 481.105(1), which defines Penalty Group 4 "codeine" as, inter alia, a 200 milligram to 100 milliliter (or 100 gram) concentration ratio when mixed with the required "nonnarcotic active medicinal ingredients." The question then becomes whether the record reflects the State satisfied its burden to elicit legally sufficient evidence of the required Penalty Group 4 concentration amounts. In support of his position on this issue, Dudley points out that the State's laboratory analyst, Charlyn Voight, testified that she did not specifically measure nor quantify the concentration of codeine contained in the liquid submitted by the police for laboratory analysis. However, we note the following testimony of Ms. Voight appears in the record: Q.(State) Ms. Voight, did you conduct a chemical analysis of the contents - the liquid contents that was found in State's Exhibit Number 1, the styrofoam cup with the lid and the straw? A.(Ms. Voight) Yes, I did. Q. Okay. What were the results of that analysis? A. That the liquid contained in the cup contained Codeine and one or more, in this case, one other active medicinal ingredient. Q. And, what was that? A. The other ingredient was Promethazine. Q. Okay. A. And this is a combination commonly found in cough syrup type preparations that contain Codeine in a concentration of less than 200 milligrams per 100 milliliters of syrup. In addition to the above testimony, Dudley introduced into evidence as Defendant's Exhibit 1, the written laboratory report in which the identical evidence as to codeine concentration was set out. In reviewing a record for legally sufficient evidence to support the conviction, we view all the evidence in the light most favorable to the verdict in order to determine whether any rational trier of fact could have found all of the essential elements of the offense proven beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979); Santellan v. State, 939 S.W.2d 155, 160 (Tex. Crim. App. 1997). In a legal sufficiency analysis, we consider all the evidence, whether properly or improperly admitted. Bobo v. State, 843 S.W.2d 572, 575-76 (Tex. Crim. App. 1992); Chambers v. State, 805 S.W.2d 459, 460 (Tex. Crim. App. 1991). The record before us contains, as set out above, the testimony from Ms. Voight that the codeine Dudley possessed was combined with another active medicinal ingredient, promethazine. There was no objection to this testimony, nor to Ms. Voight's next response that indicated the codeine/promethazine mixture was a combination typically found in concentrations of 200 milligrams of codeine per 100 milliliters of syrup. (4) Additionally, Defendant's Exhibit 1, containing the same codeine concentration evidence, was also before the jury. This is legally sufficient evidence for proof of the codeine concentration as defined under Penalty Group 4 of the Health and Safety Code. Finally, we take issue with the following statement contained in appellant's brief: "Without testimony regarding the concentration, any possible ratio of mixture could be inferred. To do so would not be to prove the codeine was listed in Penalty Group 4. It is also listed in Penalty Group 1 and Penalty Group 3." This seems to imply that, so long as the weight of the codeine is the same, proof of "concentration" alone was necessary in order to eliminate the possibility of appellant's guilt under either Penalty Group 1 or Penalty Group 3. (5) This portion of Dudley's argument is misplaced because each penalty group defines the qualitative presence of "codeine" either by (1) no use of "concentration" whatsoever, or (2) by "concentration" in proportion to other substances that are explicitly not defined as "one or more nonnarcotic active medicinal ingredients in sufficient proportion to confer on the compound, mixture, or preparation valuable medicinal qualities other than those possessed by the narcotic drug alone[.]" Indeed, in Penalty Groups 1, 3, and 4, the descriptive language of the particular controlled substance containing "codeine" contains distinctively different and concise wording. It is equally incorrect to say that a conviction for Penalty Group 4 "codeine," (with its specific requirement that the "compound, mixture, or preparation," be of such a quality that it possesses "medicinal qualities other than those possessed by the narcotic drug alone") could somehow include a conviction for Penalty Group 1 "codeine" ("Codeine methylbromide" or "Codeine-N-Oxide"). (6) At any rate, we find the evidence legally sufficient with regard to the qualitative concentration of codeine in relation to the other active nonnarcotic medicinal ingredient also proven. Dudley's first issue is overruled. (7) Dudley's second issue contends that the trial court erred in overruling his objection to the jury charge as given. Dudley was convicted under section 481.118(a) of the Texas Health and Safety Code, which states, in pertinent part, as follows: [A] person commits an offense if the person knowingly or intentionally possesses a controlled substance listed in Penalty Group 4, unless the person obtained the substance directly from or under a valid prescription or order of a practitioner acting in the course of practice. Tex. Health & Safety Code § 481.118(a) (Vernon Supp. 2001) (emphasis added). In addition, section 481.062(3) of the Health and Safety Code states that someone may possess a controlled substance if that person is "an ultimate user or a person in possession of the controlled substance under a lawful order of a practitioner. . . ." Tex. Health & Safety Code § 481.062(3) (Vernon Supp. 2001). At trial, the defense objected to the application portion of the court's charge because it did not require the jury to find that Dudley lacked a valid prescription for the codeine. The objection was overruled. Now Dudley contends that this omission mandates reversal. We disagree. Section 481.184(a) of the Health and Safety Code states that: The State is not required to negate an exemption or exception provided by this chapter in a complaint, information, indictment, or other pleading or in any trial, hearing, or other proceeding under this chapter. A person claiming the benefit of an exemption or exception has the burden of going forward with the evidence with respect to the exemption or exception. Tex. Health & Safety Code Ann. § 481.184(a) (Vernon Supp. 2001) (emphasis added). Therefore, a person claiming the benefit of the "ultimate user" exemption or defense has the burden of producing evidence that raises the defense. Wright v. State, 981 S.W.2d 197, 200 (Tex. Crim. App. 1998). "Once the defense is raised, the trial court must, if requested, instruct the jury that a reasonable doubt on the issue requires that the defendant be acquitted." Id. A review of the trial record shows that Dudley offered no evidence that he possessed the codeine by prescription. In fact, one of the arresting officers was asked whether he had found a prescription for codeine in the car. He replied that he had not. But he did indicate that he found a baby food jar with cough syrup residue in the car, which in his experience was consistent with illicit, street level abuse of codeine. Since Dudley presented no evidence that he acquired the codeine by valid prescription, he was not entitled to a jury instruction on the "ultimate user" exemption. Dudley's second issue is overruled. Appellant's conviction and sentence are affirmed. AFFIRMED. _____________________________ RONALD L. WALKER Chief Justice Submitted on July 30, 2001 Opinion Delivered October 24, 2001 Publish Before Walker, C.J., Burgess and Gaultney, JJ. CONCURRING OPINION I concur. Appellant does not contest the State's proof that he possessed a controlled substance, including adulterants or dilutants, with an aggregate weight of "200 grams or more but less than 400 grams." See Tex. Health & Safety Code Ann. § 481.118 (Vernon Supp. 2001). The controlled substance's aggregate weight puts it squarely within the second degree felony range of section 481.118(d). Appellant does not contest the sufficiency of the State's proof that he possessed a "compound, mixture, or preparation" containing codeine and "one or more nonnarcotic active medicinal ingredients in sufficient portion to confer on the . . . mixture . . . valuable medicinal qualities other than those possessed by the narcotic drug alone[.]" See Tex. Health & Safety Code Ann. § 481.105(1) (Vernon Supp. 2001). Rather, his point is that the concentration he possessed may have exceeded Penalty Group 4's concentration requirement, and instead placed his offense in Penalty Group 1 or 3. He does not contend that the concentration would have resulted in a milder punishment, such as by making his conduct a misdemeanor rather than a felony; the punishment classifications listed in section 481.118 are based upon the weight of the controlled substance possessed, and he does not contest the aggregate weight of the controlled substance he possessed. He makes the following argument in his brief. Without testimony regarding the concentration, any possible ratio of mixture could be inferred. To do so would not be to prove the codeine was listed in Penalty Group 4. It is also listed in Penalty Group 1 and Penalty Group 3. In effect, appellant maintains the State had to show the actual level of codeine concentration in order to establish that the substance he possessed fell within Penalty Group 4 rather than a penalty group that requires a higher codeine concentration with resulting greater punishment. Bottom line, his point on appeal is that he may have been guilty of a greater offense than that for which he was convicted. Because I believe the evidence was sufficient as to his guilt of possession of codeine in at least the concentration for which he was convicted, I concur in the affirmance of his conviction and sentence. _________________________________ DAVID B. GAULTNEY Justice Concurrence Delivered October 24, 2001 Publish DISSENTING OPINION I respectfully dissent to the disposition of point of error one. While this is an important case, it is a relatively simple one. Dudley attacks the legal sufficiency of the evidence concerning the concentration of the codeine possessed. Dudley was originally indicted for possession of penalty group 1 codeine, but the State amended the indictment to allege possession of penalty group 4 codeine. The application paragraph of the jury charge instructed the jury to consider if Dudley "possessed a controlled substance listed in Penalty Group 4 of the Texas Controlled Substance Act, namely, codeine . . . ." The failure to allege in the indictment the amount involved or penalty group so as to reflect what punishment is involved, whether the offense is a misdemeanor or felony, or whether a District Court has jurisdiction renders an indictment fatally defective. Consequently, the State was required to plead within which penalty group the substance fell and then prove it fell within the definition of penalty group 4. Benoit v. State, 561 S.W.2d 810, 815 (Tex. Crim. App. 1977); see also Kolbert v. State, 590 S.W.2d 711, 712 (Tex. Crim. App. 1979). Thus, the question--did the State prove it? The State concedes the only proof is the testimony from a chemist that the substance taken from Dudley was "a combination commonly found in cough syrup type preparations that contain codeine in a concentration of less than 200 milligrams per milliliters of syrup," plus her testimony that codeine is listed in penalty group 4. The State also concedes the chemist did not measure the concentration of the codeine. The State and the majority contend this expert opinion evidence is sufficient. I disagree. The necessity to prove by chemical analysis that a material is illegal contraband clearly is an essential element of the State's case. Aguilar v. State, 850 S.W.2d 640, 642 (Tex. App.--San Antonio 1993), rev'd on other grounds, 887 S.W.2d 27 (Tex. Crim. App. 1994); see also Curtis v. State, 548 S.W.2d 57, 59 (Tex. Crim. App. 1977) (although an experienced narcotics officer may identify marihuana, he may not testify that a powdered substance is heroin). An expert's opinion may be based upon sufficient relevant facts, but those facts must be either within his personal knowledge, or assumed from common or judicial knowledge, or established by evidence. Nejnaoui v. State, 44 S.W.3d 111, 118 (Tex. App.--Houston [14th Dist.] 2001, pet. filed). Our Court of Criminal Appeals has spoken several times recently on expert testimony and its value as evidence. In Jordan v. State, 928 S.W.2d 550, 554-55 (Tex. Crim. App. 1996)(footnote omitted), the court stated: While Rule 702 involves the dual inquiry of relevance and reliability, the Supreme Court emphasized that the "overarching subject" of Rule 702 is the scientific validity of the evidence at issue. [Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 593-95, 113 S. Ct. 2786, 2797]. In sorting the untested or invalid theories from those that are grounded in "good" science, trial judges are called upon to serve as "gatekeepers." Id. 509 U.S. at 595-99, 113 S. Ct. at 2798-99. With respect to the relevance consideration, the Court pointed to Rule 702's requirement that the expert's testimony "assist the trier of fact to understand the evidence or to determine a fact in issue." Id. 509 U.S. at 589-93, 113 S.Ct. at 2795-96. Expert testimony that does not relate to a fact in issue is not helpful. This consideration is what the Supreme Court referred to as the "fit" requirement. That is, the proffered testimony must be "'sufficiently tied to the facts of the case that it will aid the jury in resolving a factual dispute.'" Id. 509 U.S. at 591-93, 113 S. Ct. at 2796 (quoting United States v. Downing, 753 F.2d 1224, 1242 (3rd Cir.1985)). In line with this Court and the United States Supreme Court, the Texas Supreme Court recently held that under Texas Rule of Civil Evidence 702, the proponent of expert testimony must show that it is relevant to the issues in the case and is based on a reliable scientific foundation. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (1995). The Court emphasized the role of trial courts in scrutinizing "proffered evidence for its scientific reliability when it is based upon novel scientific theories, sometimes referred to as 'junk science.'" Id. at 554. The focus of the courts in Kelly, Daubert, and Robinson, was on assessing the scientific reliability of the evidence at issue, rather than its relevance. As discussed at length in those cases, reliability depends upon whether the evidence has its basis in sound scientific methodology. This demands a certain technical showing. Accordingly, it is upon the reliability inquiry that trial courts can weed out testimony pertaining to so-called "junk science." Id. It is largely to this end that trial judges are called upon to serve as "gatekeepers." Daubert, supra. While "junk science" or otherwise inadequately tested scientific theories might be shown to relate to the facts of a case and to that extent be of assistance to the jury, it will not have a sufficiently sound scientific basis to be reliable. 928 S.W.2d at 554-55. Later in Hartman v. State, 946 S.W.2d 60, 62-63 (Tex. Crim. App. 1997)(footnote omitted), the court said: Nowhere in Kelly did we limit the two-pronged standard to novel scientific evidence. The Supreme Court in Daubert directly addressed the issue in a footnote, stating "[a]lthough the Frye decision itself focused exclusively on 'novel' scientific techniques, we do not read the requirements of Rule 702 to apply specifically or exclusively to unconventional evidence." Daubert, 509 U.S. at 593 n. 11, 113 S. Ct. at 2796 n. 11. The Supreme Court noted that "under the Rules, the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable." Id. at 589, 113 S. Ct. at 2795 (emphasis added). We likewise see no value in having a different standard of admissibility for novel scientific evidence. The problems presented in determining whether or not a particular type of evidence would be considered "novel" are daunting enough to reject application of a dual standard. Moreover, we observe that the factors and criteria set forth in Kelly as bearing upon the reliability of proffered scientific evidence are adequate measure for assuring that "novel" scientific evidence which is "junk science" is excluded. These factors "address the soundness of the underlying scientific theory and technique." Jordan v. State, 928 S.W.2d 550, 554 (Tex.Crim.App.1996). This is the linchpin of Rule 702: [R]eliability depends upon whether the evidence has its basis in sound scientific methodology. This demands a certain technical showing. Accordingly, it is upon the reliability inquiry that trial courts can weed out testimony pertaining to so-called "junk science." Id. It is largely to this end that trial judges are called upon to serve as "gatekeepers." Daubert, supra. While "junk science" or otherwise inadequately tested scientific theories might be shown to relate to the facts of a case and to that extent be of assistance to the jury, it will not have a sufficiently sound scientific basis to be reliable. Id. at 555. The standard adopted by this Court in Kelly applies to all scientific evidence offered under Rule 702. The court of appeals erred in applying a standard different than that set forth in Kelly. . . . 946 S.W.2d at 62-63. The Courts have been consistent; there must be facts underlying the expert's opinion or it is "no evidence." Simply because an expert says it . . . "don't make it so!" (8) It was, in my view, necessary for the chemist to actually test the substance for its concentration. Since she admitted she did not do so, her opinion concerning the concentration equals "no evidence." Therefore, the state did not prove the codeine possessed by Dudley was penalty group 4 codeine and failed to prove an essential element of the indictment. Consequently, the evidence is legally insufficient and this court should reverse and acquit. Gollihar v. State, 46 S.W.3d 243, 245 (Tex. Crim. App. 2001) (citing Greene v. Massey, 437 U.S. 19, 98 S. Ct. 2151, 57 L. Ed. 2d 15 (1978); Burks v. United States, 437 U.S. 1, 98 S. Ct. 2141, 57 L. Ed. 2d 1 (1978)). DON BURGESS Justice Dissent Delivered October 24, 2001 Publish 1. Tex. Health & Safety Code Ann. § 481.102(2) & (3)(A) (Vernon Supp. 2001). 2. Tex. Health & Safety Code Ann. § 481.104(a)(4) (Vernon Supp. 2001). 3. Tex. Health & Safety Code Ann. § 481.105(1) (Vernon Supp. 2001). 4. The dissent addresses the issue of the lack of scientific reliability of Voight's testimony. However, we note that neither the reliability of her testimony nor her qualifications as an expert are raised by any point of error in this appeal. While a brief must state all issues or points presented for review; the statement of the issue will be treated as covering every subsidiary question that is fairly included. See Tex. R. App. P. 38.1(e). "The brief must also contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record." Tex. R. App. P. 38.1(h). Here, there was no issue raised on appeal regarding the reliability of the testimony or Ms. Voight's qualifications. Consequently, we do not address them. 5. The concurrence takes the position that Dudley is essentially contending he is guilty of a greater offense than that for which he was convicted. As we explain above, because of his misplaced characterization of the penalty group distinctions of codeine as based solely on "concentration," Dudley was actually never exposed to conviction for any "codeine" offense in either Penalty Group 1 or Penalty Group 3. 6. Nor are we on "safe footing" by making any sort of favorable comparison between Penalty Group 4 "codeine," as specifically defined, with Penalty Group 3 "codeine," which includes codeine "or any of their salts: [in a particular grams per milliliter concentration] or not more than 90 grams per dosage unit, with one or more active, nonnarcotic ingredients in recognized therapeutic amounts[.]" Both penalty group descriptions contain words of art from the scientific community that do not, at least on their face, appear to have identical meanings. Nor is it a simple matter to say that proof of codeine combined with another nonnarcotic active medicinal ingrediant, such as Promethazine, but without an analysis done for specific concentration amounts automatically places the codeine in Penalty Group 1 with its alternative description of "Codeine not listed in Penalty Group 3 or 4[.]" Thankfully, these issues are not before us in the instant appeal. 7. For an interesting discussion encompassing the concepts of "adulterants and dilutants," the "entity theory," and chemical "precursors," as involving weight or amount of controlled substance present affecting legal sufficiency of the evidence, see Dowling v. State, 885 S.W.2d 103 (Tex. Crim. App. 1992) ("original" opinion & opinion on rehearing). 8. Consider this language from Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706, 712-13 (Tex. 1997)(footnote omitted): Justice Gonzalez, in writing for the Court, gave rather colorful examples of unreliable scientific evidence in E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 558 (Tex.1995), when he said that even an expert with a degree should not be able to testify that the world is flat, that the moon is made of green cheese, or that the Earth is the center of the solar system. If for some reason such testimony were admitted in a trial without objection, would a reviewing court be obliged to accept it as some evidence? The answer is no. In concluding that this testimony is scientifically unreliable and therefore no evidence, however, a court necessarily looks beyond what the expert said. Reliability is determined by looking at numerous factors including those set forth in Robinson and Daubert. The testimony of an expert is generally opinion testimony. Whether it rises to the level of evidence is determined under our rules of evidence, including Rule 702, which requires courts to determine if the opinion testimony will assist the jury in deciding a fact issue. While Rule 702 deals with the admissibility of evidence, it offers substantive guidelines in determining if the expert testimony is some evidence of probative value. Similarly, to say that the expert's testimony is some evidence under our standard of review simply because the expert testified that the underlying technique or methodology supporting his or her opinion is generally accepted by the scientific community is putting the cart before the horse. As we said in Robinson, an expert's bald assurance of validity is not enough. 923 S.W.2d at 559 (quoting Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1316 (9th Cir.) (on remand) (holding that expert's assertion of validity is not enough; there must be objective, independent validation of the expert's methodology), cert. denied, 516 U.S. 869, 116 S. Ct. 189, 133 L. Ed. 2d 126 (1995)). The view that courts should not look beyond an averment by the expert that the data underlying his or her opinion are the type of data on which experts reasonably rely has likewise been rejected by other courts. The underlying data should be independently evaluated in determining if the opinion itself is reliable. . . .	01-03-2023	09-09-2015
https://www.courtlistener.com/api/rest/v3/opinions/2404736/	93 N.J. 324 (1983) 461 A.2d 138 H. ROSENBLUM, INC., A NEW JERSEY CORPORATION, SUMMIT GIFT GALLERIES, INC., A NEW JERSEY CORPORATION (FORMERLY KNOWN AS SUMMIT PROMOTIONS, INC.), HARRY ROSENBLUM AND BARRY ROSENBLUM, PLAINTIFFS-APPELLANTS, v. JACK F. ADLER ... [AND 426 OTHER NAMED DEFENDANTS LISTED IN THE COMPLAINT], INDIVIDUALLY AND AS PARTNERS TRADING AS TOUCHE ROSS & CO., SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS-RESPONDENTS. H. ROSENBLUM, INC., A NEW JERSEY CORPORATION, SUMMIT GIFT GALLERIES, INC., A NEW JERSEY CORPORATION (FORMERLY KNOWN AS SUMMIT PRODUCTIONS, INC.), HARRY ROSENBLUM AND BARRY ROSENBLUM, PLAINTIFFS-RESPONDENTS, v. JACK F. ADLER ... [AND 426 OTHER NAMED DEFENDANTS LISTED IN THE COMPLAINT], INDIVIDUALLY AND AS PARTNERS TRADING AS TOUCHE ROSS & CO., SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS-APPELLANTS. The Supreme Court of New Jersey. Argued November 22, 1982. Decided June 9, 1983. 328 Bradley R. Brewer, a member of the New York bar, argued the cause for appellants and respondents H. Rosenblum, Inc., etc., et al. (Cummins, Dunn & Pashman, attorneys; Donald Horowitz, of counsel). 329 Leon P. Gold, a member of the New York bar, argued the cause for respondents and appellants Jack F. Adler, et al. (Schneider, Schneider & Balt, attorneys). The opinion of the Court was delivered by SCHREIBER, J. This case focuses upon the issue of whether accountants should be responsible for their negligence in auditing financial statements. If so, we must decide whether a duty is owed to those with whom the auditor is in privity, to third persons known and intended by the auditor to be the recipients of the audit, and to those who foreseeably might rely on the audit. Subsumed within these questions is a more fundamental one: to what extent does public policy justify imposition of a duty to any of these classes? I The issues herein arose on defendants' motion for partial summary judgment. The facts that follow were, therefore, adduced from the record in a light most favorable to the plaintiffs. The plaintiffs Harry and Barry Rosenblum brought this action against Touche Ross & Co. (Touche), a partnership, and the individual partners. Touche, a prominent accounting firm, had audited the financial statements of Giant Stores Corporation (Giant). These plaintiffs, allegedly relying on the correctness of the audits, acquired Giant common stock in conjunction with the sale of their business to Giant. That stock subsequently proved to be worthless, after the financial statements were found to be fraudulent. Plaintiffs claim that Touche negligently conducted the audits and that Touche's negligence was a proximate cause of their loss. Giant, a Massachusetts corporation, operated discount department stores, retail catalog showrooms and art and gift shops. Its common stock was publicly traded, its initial public offering having been made pursuant to a registration statement filed 330 with the Securities and Exchange Commission (SEC) in 1969. Giant was required to file audited financial statements with the SEC as part of its annual report to stockholders and Touche conducted those audit examinations during the fiscal years 1969 through 1972. Giant's fiscal year was the twelve months ending January 30. In November 1971 Giant commenced negotiations with the plaintiffs for the acquisition of their businesses in New Jersey (H. Rosenblum, Inc. and Summit Promotions, Inc.). These enterprises had retail catalog showrooms in Summit and Wayne. The merger negotiations culminated in an agreement executed on March 9, 1972. During the discussions two significant events occurred. First, on December 14, 1971, Giant made a public offering of 360,000 shares of its common stock. The financial statements included in the prospectus of that offering contained statements of annual earnings for four years ending January 30, 1971, as well as balance sheets as of January 30 for each of those years, which had been audited by Touche. Touche's opinion affixed to those financials stated that it had examined the statements of earnings and balance sheets "in accordance with generally accepted auditing standards" and that the financial statements "present[ed] fairly" Giant's financial position. Similar data had been incorporated in Giant's annual report for the year ending January 30, 1971. Second, Touche began its audit of Giant's financials for the year ending January 29, 1972. This audit was completed on April 18, 1972. The attached Touche opinion bore the same language affixed to the 1971 statements. One of the Touche partners, Armin Frankel, was present at some of the merger discussions. It does not appear that he participated in the negotiations, though the plaintiffs assert that they received the January 1971 audited statements during a meeting at which Frankel was present. Although he denies making the projection, Frankel is also alleged to have stated during one meeting that the preliminary figures of the 1972 audit then under way indicated it was going to be "a very 331 strong year for Giant Stores, it is probably going to be the best in history...." The merger agreement provided that the Rosenblums would receive an amount of Giant stock, up to a maximum of 86,075 shares, depending upon the net income of their enterprises for their fiscal year ending December 31, 1971. The closing was to be scheduled between May 15 and May 31, 1972. Giant agreed that as of the closing it would represent and warrant that there had "been no material adverse change in the business, properties or assets of Giant and its Subsidiaries since July 31, 1971." The plaintiffs claim they relied upon the 1972 audited statements before closing the transaction on June 12, 1972. The Rosenblums received Giant common stock, which had been listed on the American Stock Exchange in February 1972 and was being traded on that Exchange when the merger was effected. After the Rosenblum closing, Giant made another public offering of common stock in August 1972. Touche furnished for this Giant registration statement the audited financial statements for each of the five fiscal years ending January 29, 1972, to which was affixed Touche's unqualified opinion. Giant had manipulated its books by falsely recording assets that it did not own and omitting substantial amounts of accounts payable so that the financial information that Touche had certified in the 1971 and 1972 statements was incorrect.[1] The fraud was uncovered in the early months of 1973. Trading in Giant stock on the American Stock Exchange was suspended in April 1973 and never resumed. On May 22, 1973, Touche withdrew its audit for the year ending January 29, 1972. Giant filed a bankruptcy petition in September 1973. The Giant stock received by the plaintiffs in the merger had become worthless. 332 The plaintiffs' four-count complaint, predicated on the audited financials for the years ending January 30, 1971 and January 29, 1972, charged fraudulent misrepresentation, gross negligence, negligence and breach of warranty. Touche moved for partial summary judgment. It sought to have the court dismiss the claims based on alleged negligence in making the audit for the year ending January 30, 1971 and on alleged negligence, gross negligence and fraud in making the audit for the year ending January 29, 1972. The trial court granted the motion with respect to the 1971 financials and denied it as to the 1972 financials. The Appellate Division granted plaintiffs' motion for leave to appeal, but affirmed the trial court's dismissal of the negligence claim based on the 1971 audit. 183 N.J. Super. 417 (1982). We granted plaintiffs' motion for leave to appeal. 91 N.J. 191 (1982). The defendants had also moved for leave to appeal from the denial of their motion for partial summary judgment addressed to claims predicated on the 1972 financials. The Appellate Division had denied that motion. The defendants subsequently moved before us for leave to appeal from the Appellate Division's denial. We acceded to that motion after we had granted plaintiffs' motion for leave to appeal. Thus the propriety of the trial court's disposition of Touche's entire motion for partial summary judgment is now before us. II An independent auditor is engaged to review and examine a company's financial statements and then to issue an opinion with respect to the fairness of that presentation. That report is customarily attached to the financial statements and then distributed by the company for various purposes. Recipients may be stockholders, potential investors, creditors and potential creditors. When these parties rely upon a negligently prepared auditor's report and suffer damages as a result, the question arises whether they may look to the auditor for compensation. 333 In other words, to whom does the auditor owe a duty? The traditional rule is that the auditor's duty is owed only to those with whom he is in privity or to those who are known beneficiaries at the time of the auditor's undertaking. This rule is commonly attributed to an opinion of Chief Judge Cardozo in Ultramares v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931). A second rule has been expressed in Section 552 of the Restatement (Second) of Torts. Under the Restatement, liability is extended to a known and intended class of beneficiaries. For example, if the auditor knows that the report is to be prepared for bank borrowing, then his duty would run to the bank to whom the company delivered the opinion. A third rule is that the auditor's duty is owed to those whom the auditor should reasonably foresee as recipients from the company of the financial statements for authorized business purposes. See JEB Fasteners v. Marks, Bloom & Co. [1981] 3 All E.R. 289, 296. A claim against the auditor is realistically one predicated upon his representations. Though the theory advanced here by the plaintiffs is directed to the service performed by accountants and thus is in the nature of malpractice, their claim can be viewed as grounded in negligent misrepresentation. In the complaint the plaintiffs seek recompense for economic loss from a negligent supplier of a service with whom the claimants are not in privity. It has generally been held with respect to accountants that imposition of liability requires a privity or privity-like relationship between the claimant and the negligent actor. We must examine a number of issues in order to determine whether we should so limit such actions in New Jersey. First, we shall consider whether, in the absence of privity, an action for negligent misrepresentation may be maintained for economic loss against the provider of a service. This involves (1) a negligent misrepresentation, (2) in furnishing a service, (3) that results in economic loss, (4) to a person not in privity with the declarant. 334 Second, we shall determine what duty the auditor should bear to best serve the public interest in light of the role of the auditor in today's economy. III Negligent misrepresentation is a legally sound concept. An incorrect statement, negligently made and justifiably relied upon, may be the basis for recovery of damages for economic loss or injury sustained as a consequence of that reliance. Pabon v. Hackensack Auto Sales, Inc., 63 N.J. Super. 476 (App. Div. 1960), presents an example of a valid physical damage claim predicated upon misrepresentation. The driver of an automobile sued the automobile dealer and manufacturer for damages sustained when his steering wheel locked and the automobile went out of control and struck a pole. A judgment of involuntary dismissal at the close of the plaintiff's case was reversed. One theory advanced by the plaintiff was based on the negligent representation made by the dealer that the steering characteristic plaintiff had encountered prior to the accident was not the result of any deficiency, but rather was normal. The Appellate Division observed that negligence might be inferred from the falsity of the representation. It commented: A false statement negligently made, and on which justifiable reliance is placed, may be the basis for the recovery of damages for injury sustained as a consequence of such reliance. Russell v. First National Stores, 96 N.H. 471, 79 A.2d 573 (Sup.Ct. 1951); Restatement, Torts, § 552, especially Illustration 2; 1 Harper & James, supra, § 7.6, pp. 545-51; Prosser, supra, § 88, pp. 541-45; 23 Am.Jur., Fraud and Deceit, § 126, p. 917; 65 C.J.S. Negligence § 20, p. 427. The statement need not be a factual report, but may consist of an expert opinion. Justification for the imposition of a duty of care upon the speaker is found in the respective positions of the one making the representation and the relying party, the former purporting to exercise the skill and competency compatible with his profession or calling, the latter openly placing his faith on such reputed skill. There must be knowledge, or reason to know, on the part of the speaker that the information is desired for a serious purpose, that the seeker of the information intends to rely upon it, and that if the information or opinion is false or erroneous, the relying party will be injured in person or property. [Id. at 497] Recovery of economic loss, due to negligent misrepresentation by one furnishing a service, has long been permitted when 335 there existed a direct contractual relationship between the parties or when the injured third party was a known beneficiary of the defendant's undertaking. Thus, for example, in Economy B. & L. Ass'n v. West Jersey Title Co., 64 N.J.L. 27 (Sup.Ct. 1899), the plaintiff agreed to loan $3,000 to one Moore secured by a first mortgage on Moore's property, title to which was to be certified by a title insurance company. Moore advised the defendant title insurance company of his agreement and retained the defendant to make the search and certificate. Moore delivered the certificate to and obtained the loan from the plaintiff. The plaintiff was held to have a good cause of action against the certifying title company when it was discovered that the carelessly made title search had not disclosed a prior recorded mortgage. Our case law, however, has been split on whether privity or a similar relationship is necessary in a suit against the supplier of a service for negligent misrepresentation causing economic loss. Kahl v. Love, 37 N.J.L. 5 (Sup.Ct. 1873), is probably the first reported New Jersey negligent misrepresentation case concerned with a service resulting in economic loss. Defendant was the Jersey City collector of taxes. Upon receiving the check of a landowner in payment of taxes, defendant gave the landowner a receipt in full. The land, the subject of these taxes, was sold to the plaintiff, who relied on the receipt as proof of payment of the taxes. The check was later dishonored and taxes were levied on the lands after the plaintiff acquired title. The plaintiff sued the collector for the damages suffered and obtained a judgment. The Supreme Court reversed, citing both the absence of a duty and the unreasonableness of the plaintiff's reliance. The Court assumed that the defendant knew that these receipts were used on the sale of land to establish that taxes were paid up. It held that a duty, arising from contract or otherwise, had to exist before liability could ensue. Chief Justice Beasley, writing on behalf of the Court, stated: Such a restriction on the right to sue for a want of care in the exercise of employments or the transaction of business, is plainly necessary to restrain the 336 remedy from being pushed to an impracticable extreme. There would be no bounds to actions and litigious intricacies, if the ill effects of the negligences of men could be followed down the chain of results to the final effect.[2] [Id. at 8] A more recent lower court decision has held to the contrary. In Immerman v. Ostertag, 83 N.J. Super. 364 (Law Div. 1964), the court stated that a notary public owes a duty to third persons who rely on his acknowledgment to refrain from acts or omissions that constitute negligence. Immerman accepted the proposition that "an acknowledgment-taking officer has a duty to refrain from acts or omissions which constitute negligence, a duty which he owes not only to persons with whom he has privity, but also to any member of the public who, in reasonable contemplation, might rely upon the officer's certification." 83 N.J. Super. at 369. This Court has approvingly cited Immerman as articulating the general rule with respect to notaries. Commercial Union Ins. Co. v. Thomas-Aitken Constr. Co., 54 N.J. 76, 81 (1969). Similarly, lack of privity has been held not to bar the liability of an independent contractor engaged to perform services for his negligent nonfeasance. Gold Mills, Inc. v. Orbit Processing Corp., 121 N.J. Super. 370 (Law Div. 1972). The court there observed: Such liability should exist when the contractor has undertaken performance, whether his negligent performance results from the doing of something which a reasonably prudent person would not have done or from the failure to do something which a reasonably prudent person would have done. So long as the privity rule is no longer viable in the area of tort liability there is no reason why a contractor should not have the same duties toward a stranger to the contract as any member of society to another, i.e., to exercise due care to avoid injury to another's person or property. [Id. at 376] We have never passed upon the problem of an accountant's liability to third persons who have relied on negligently audited 337 statements to their economic detriment.[3] Many other jurisdictions have limited an accountant's liability to those with whom the accountant is in privity. The earliest decision in the United States our research has uncovered is Landell v. Lybrand, 264 Pa. 406, 107 A. 783 (1919), holding that an accountant was not liable for misstatements in a company's financial statements to a third person who had relied upon the financials and had purchased the company's stock. The leading opinion is that of Chief Judge Cardozo in Ultramares v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931). In rejecting a claim against an accounting firm for a negligent audit relied upon by a third person who advanced credit to the firm's client, he wrote: If liability for negligence exists, a thoughtless slip or blunder, the failure to detect a theft or forgery beneath the cover of deceptive entries, may expose accountants to a liability in an indeterminate amount for an indeterminate time to an indeterminate class. The hazards of a business conducted on these terms are so extreme as to enkindle doubt whether a flaw may not exist in the implication of a duty that exposes to these consequences. [255 N.Y. at 179-80, 174 N.E. at 444] Chief Judge Cardozo, like Chief Justice Beasley in Kahl, believed that imposition of this type of exposure would be an undue burden upon the declarants, when balanced against the functions they performed. In Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922), Judge Cardozo had held liability did exist in favor of a third party when it was shown that the certification was made for the use of that third person. There a bean seller contracted with the defendant, a professional weigher, to weigh and certify a shipment of beans being sold to the plaintiff. The plaintiff's suit against the professional weigher was upheld because the weigher knew the certification was to be used by the plaintiff. Ultramares and Glanzer acknowledge the existence 338 of a duty only in favor of the person for whose "primary benefit" the statements were intended. Many commentators have questioned the wisdom of Ultramares and Glanzer. See, e.g., Wiener, "Common Law Liability of the Certified Public Accountant for Negligent Misrepresentation," 20 San Diego L.Rev. 233 (1983); Besser, "Privity? An Obsolete Approach to the Liability of Accountants to Third Parties," 7 Seton Hall L.Rev. 507 (1976); Marinelli, "The Expanding Scope of Accountants' Liability to Third Parties," 23 Case W.Res.L.Rev. 113, 117-22 (1971); Seavey, "Mr. Justice Cardozo and the Law of Torts," 52 Harv.L.Rev. 372, 398-404 (1939); Solomon, "Ultramares Revisited: A Modern Study of Accountants' Liability to the Public," 18 DePaul L.Rev. 56 (1968). Criticism of the primary benefit rule led in part to the adoption of Section 552 of the Restatement (Second) of Torts, which limited liability for negligent misrepresentation to the loss suffered (a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and (b) through reliance upon it in a transaction that he [the auditor] intends the information to influence or knows that the recipient so intends or in a substantially similar transaction. When applied to an auditor, the Restatement limits the persons to whom he owes a duty to his client, to intended identifiable beneficiaries and to any unidentified member of the intended class of beneficiaries. The only extension in the Restatement beyond Ultramares and Glanzer appears to be that the auditor need not know the identity of the beneficiaries if they belong to an identifiable group for whom the information was intended to be furnished. There is a substantial split of authority among the courts, some following Ultramares and others adopting the Restatement. See Annot., "Liability of public accountant to third parties," 46 A.L.R.3d 979, 989 (1972). Both Ultramares and the Restatement demand a relationship between the relying third party and the auditor. Unless some policy considerations warrant otherwise, privity should 339 not be, and is not, a salutary predicate to prevent recovery. Generally, within the outer limits fixed by the court as a matter of law, the reasonably foreseeable consequences of the negligent act define the duty and should be actionable. We long ago discarded the requirement of privity in a products liability case based on negligence.[4]See Martin v. Studebaker Corp., 102 N.J.L. 612, 614-15 (E. & A. 1926). Martin approved Judge Cardozo's seminal opinion in MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916). It is interesting to compare his language in MacPherson with his position in Ultramares. In MacPherson Cardozo wrote: The contractor who builds a scaffold invites the owner's workmen to use it. The manufacturer who sells the automobile to the retail dealer invites the dealer's customers to use it. The invitation is addressed in the one case to determinate persons and in the other to an indeterminate class, but in each case it is equally plain, and in each case its consequences must be the same [liability for negligence, regardless of the lack of privity]. There is nothing anomalous in a rule which imposes upon A., who has contracted with B., a duty to C. and D. and others according as he knows or does not know that that the subject-matter of the contract is intended for their use. [111 N.E. at 1054] It is clear that an action for negligence with respect to an injury arising out of a defective product may be maintained without privity. The negligence involved may be that ascribable to negligent misrepresentation. In Martin v. Bengue, Inc., 25 N.J. 359 (1957), we held that the plaintiff had a viable cause of action against the manufacturer of an ointment because the manufacturer's directions accompanying the product assured that the ointment could be safely used. The directions were misleading because they made no reference to the dangers of the flammability of the vapors 340 emitted. The directions contained a negligent misrepresentation upon which a viable cause of action could be predicated. In O'Donnell v. Asplundh Tree Expert Co., 13 N.J. 319 (1953), the plaintiff, a tree trimmer, fell and was injured when the hook securing his safety belt broke. The hook had been purchased by the plaintiff's employer from the defendant. The defendant had negligently represented to the employer that this safety hook was adequate to be used by tree trimmers as a safety hook or snap. In reversing the trial court's judgment of dismissal entered at the conclusion of the plaintiff's case, we referred to the careless misrepresentations of the defendant to the employer that the hooks were made of proper material, and stated that such representations "are a factor to be considered in determining the defendant's negligence." In O'Donnell we referred to and relied upon Thomas v. Winchester, 6 N.Y. 397 (1852), in which the New York Court of Appeals held that a manufacturer of drugs and medicines who carelessly labeled a deadly poison as a harmless medicine and sent it so labeled into the market was liable to those who were injured by using it. These cases demonstrate that negligent misrepresentations referring to products may be the basis of liability irrespective of privity.[5] Damages for products liability have not been limited to physical injury. Recovery for economic loss has also been permitted. In Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 60 (1965), Justice Francis observed that [f]rom the standpoint of principle, we perceive no sound reason why the implication of reasonable fitness should be attached to the transaction and be actionable against the manufacturer where the defectively-made product has caused personal injury, and not actionable when inadequate manufacture has put 341 a worthless article in the hands of an innocent purchaser who has paid the required price for it.[6] Why should a claim of negligent misrepresentation be barred in the absence of privity when no such limit is imposed where the plaintiff's claim also sounds in tort, but is based on liability for defects in products arising out of a negligent misrepresentation? If recovery for defective products may include economic loss, why should such loss not be compensable if caused by negligent misrepresentation? The maker of the product and the person making a written representation with intent that it be relied upon are, respectively, impliedly holding out that the product is reasonably fit, suitable and safe and that the representation is reasonably sufficient, suitable and accurate. The fundamental issue is whether there should be any duty to respond in damages for economic loss owed to a foreseeable user neither in privity with the declarant nor intended by the declarant to be the user of the statement or opinion. IV There remains to be considered whether the public interest will be served by a proposition holding an auditor responsible for negligence to those persons who the auditor should reasonably foresee will be given the audit to rely upon and do in fact place such reliance on the audit to their detriment. Should there be such a duty imposed? Chief Justice Weintraub in Goldberg v. Housing Auth. of Newark, 38 N.J. 578, 583 (1962), explained the judicial analysis that must be made: Whether a duty exists is ultimately a question of fairness. The inquiry involves a weighing of the relationship of the parties, the nature of the risk, and the public interest in the proposed solution. 342 See also Suter v. San Angelo Foundry & Machine Co., 81 N.J. 150, 172-73 (1979); Newmark v. Gimbel's Inc., 54 N.J. 585, 596-97 (1969) (stating that doctors and dentists should not be held to duty of strict liability because they furnish services essential to society that are so necessarily and intimately related to public health that their obligation ought to be expressed in a duty to exercise reasonable competence and care to their patients; that the importance of these services "outweighs in the [policy] scale any need for imposition ... of the rules of strict liability in tort"); Caputzal v. The Lindsay Co., 48 N.J. 69, 75-76 (1966); 2 Harper & James, Law of Torts § 18.6, at 1052 (1956) (suggesting policy considerations involve balancing of several factors: "the burden [that the suggested duty] would put on defendant's activity; the extent to which the risk is one normally incident to that activity; the risk and the burden to plaintiff; the respective availability and cost of insurance to the two parties; the prevalence of insurance in fact; the desirability and effectiveness of putting the pressure to insure on one rather than the other, and the like"). The fairness of the imposition of a duty on accountants cannot be appraised without an understanding of the independent accountant's auditing function. It is particularly important to be aware of the independent auditor's role in order to assess the propriety of imposing any duty to those who may rely on the audit. Accounting is the act of identifying, measuring, recording, and communicating financial information about an economic unit. W. Pyle & J. White, Fundamental Accounting Principles 1 (1972). It has been said that accountability has clearly been the social and organizational backbone of accounting for centuries. Modern society and organizations depend upon intricate networks of accountability which are based on the recording and reporting of these activities. This process of accounting is essential to the proper functioning of society and organizations. Accounting, therefore, starts with the recording and reporting of activities and their consequences, and ends with the discharging of accountability. This basically describes accounting, at least if we attempt to interpret the existing practice rationally. We may, therefore, say 343 that accountability is what distinguishes accounting from other information systems in an organization or in a society. [Y. Ijiri, "Theory of Accounting Measurement," Studies in Accounting Research No. 10 (American Accounting Association) 32 (1975) (emphasis added)] The company prepares the financial statements in the first instance. The independent auditor's role in the accountability process is to scrutinize management's accountability reports. Commission on Auditors' Responsibilities, American Institute of Certified Public Accountants, Report, Conclusions and Recommendations 1 (1978). The auditor must make such an examination so as to enable him to express an opinion on the fairness of the financial presentation in the statements. The professional standards of the American Institute of Certified Public Accountants express the auditor's function as follows: The objective of the ordinary examination of financial statements by the independent auditor is the expression of an opinion on the fairness with which they present financial position, results of operations, and changes in financial position in conformity with generally accepted accounting principles. [Statements on Auditing Standards, 1 AICPA, Professional Standards, § 110.01 (1972)][7] The auditor is concerned with generally accepted accounting principles, that is, acceptable assumptions, procedures and techniques for the preparation of financial statements. Dawson, "Auditor's Third Party Liability," 46 Wash.L.Rev. 675, 691 (1971). Auditing standards have been developed by the American Institute of Certified Public Accountants governing examination of statements and reporting as to whether generally accepted principles and practices have been followed. Statements on Auditing Standards, 1 AICPA, Professional Standards, § 110.01 (1972). To perform these functions the auditor must, among other things, familiarize himself with the business, its operation and reporting methods and industry-wide conditions. It is necessary 344 to understand the financial and accounting characteristics and practices of the enterprise. In short, the auditor must be so knowledgeable that he can render an "informed opinion." There are certain limitations within the accounting framework. The proper accounting treatment of some matters may not be settled. For example, research and development might be written off immediately as an expense or capitalized and disposed of over a period of time. Similarly, there is considerable debate over the proper method for depreciating intangible assets. An auditor's review is subject to similar constraints because the financial statements cannot be more reliable than the underlying accounting methodology. The auditor must critically evaluate the accounting principles selected to measure performance, but some of the basic data upon which the auditor relies are not as a practical matter verifiable. The auditor is neither required to investigate every supporting document, nor deemed to have the training or skills of a lawyer or criminal investigator. Commission on Auditor's Responsibilities, American Institute of Certified Public Accountants, Report, Conclusions and Recommendations 45 (1978). Nonetheless, the independent auditor should be expected to detect illegal or improper acts that would be uncovered in the exercise of normal professional skill and care. The auditor should exercise reasonable care in verifying the underlying data and examining the methodology employed in preparing the financial statements. The accountant must determine whether there are suspicious circumstances and, even in the absence of suspicious circumstances, make a reasonable sampling or apply some testing technique. Hawkins, "Professional Negligence Liability of Public Accountants," 12 Vand.L.Rev. 797, 805 (1959). This does not mean the auditor will always be able to discover material fraud. Yet the audit, particularly when it uncovers fraud, dishonesty, or some other illegal act, serves an undeniably beneficial public purpose. 345 At one time the audit was made primarily to inform management of irregularities and inefficiencies in the business. See Hallett & Collins, "Auditors' Responsibility for Misrepresentation: Inadequate Protections for Users of Financial Statements," 44 Wash.L.Rev. 139, 178 (1968); Comment, "Accountant's Liability for Negligence," 48 Fordham L.Rev. 401, 405 (1979). That function remains one of the principal reasons for the audit. Gradually a need for independent audits was generated by public ownership of business enterprises and by requirements of the stock exchanges[8] and the Securities and Exchange Commission (SEC).[9] Institutional investors, investment specialists, stockholders, and lenders demanded more and reliable information. It is now well recognized that the audited statements are made for the use of third parties who have no contractual relationship with the auditor. Moreover, it is common knowledge that companies use audits for many proper business purposes, such as submission to banks and other lending institutions that might advance funds and to suppliers of services and goods that might advance credit. The SEC twenty-five years ago stated: "The responsibility of a public accountant is not only to the client who pays his fee, but also to investors, creditors and others who may rely on the financial statements which he certifies." In re Touche, Niven, Bailey & Smart, 37 S.E.C. 629, 670 (1957). These uses as well as governmental requirements make financial statements reviewed by independent qualified accountants indispensable. Government has increasingly utilized 346 accounting as a means to control business activities. Some examples of such use are public utility rate regulation and regulation of banks and insurance companies. The SEC has emphasized accountability through disclosure, accomplished in part by examinations and reports of independent auditors under the Securities Act of 1933 and the Securities Exchange Act of 1934. In In re Kerlin, SEC Accounting Release 105 (1966), the Securities and Exchange Commission observed: A public accountant's examination is intended to be an independent check upon management's accounting of its stewardship. Thus he ha[s] a direct and unavoidable responsibility of his own, particularly where his engagement relates to a company which makes filings with the Commission or in which there is substantial public interest. The auditor's function has expanded from that of a watchdog for management to an independent evaluator of the adequacy and fairness of financial statements issued by management to stockholders, creditors, and others. Broad, "The Progress of Auditing," 100 J. Accountancy 38, 38-39 (1955); Hallett & Collins, "Auditors' Responsibility for Misrepresentation," 44 Wash.L.Rev. 139, 178 (1968). The changing function of an independent public accountant has been described as follows by J. Carey, one-time executive director of the American Institute of Accountants, in Professional Ethics of Public Accounting (1946) at 13-14: Whenever he certifies a financial statement the certified public accountant is potentially, at least, rendering a service to two or more parties whose interests may come into conflict management and stockholder, borrower and lender, purchaser and seller. He may, and often does, serve simultaneously competitors in the same line of business, without fear on the part of either client that he will favor the one or the other. It is the peculiar obligation of the certified public accountant, which no other profession has to impose on its members, to maintain a wholly objective and impartial attitude toward the affairs of the client whose financial statements he certifies. The certified public accountant acknowledges a moral responsibility (and under the Securities Act this is made a legal and financial responsibility) to be as mindful of the interests of strangers who may rely on his opinion as of the interests of the client who pays his fee. This is at the same time a heavy burden and a proud distinction. It marks the certified public accountant as an individual of the highest integrity; a tough-minded technician whose judgment cannot be unbalanced by the strongest pressures, 347 who stakes a hard-earned professional reputation on his ability to express a fair and just opinion on which all concerned may rely; in the broad sense, a highly useful servant to society as a whole. ... The certified public accountant, therefore, in providing accounting statements which all concerned may accept as disinterested expressions, based on technically sound procedures and experienced judgment, may serve as a kind of arbiter, interpreter, and umpire among all the varied interests. Thereby he can eliminate the necessity for costly separate investigations by each party at interest, as well as endless doubts, delays, misunderstandings, and controversies which are so much sand in the economic machine. [Quoted in In re Touche, Niven, Bailey & Smart, 37 S.E.C. 629, 671 (1957)] The two most important qualities of the auditor are the expertise that he brings to the project and the independence with which he performs his task. See Wixon & Kell, Accountants' Handbook 28.1 (4th ed. 1956). The auditor is not only labeled as independent, but also is expected to be independent in fact. The public accountant must report fairly on the facts whether favorable or unfavorable to the client. See 82 J. Accountancy 449, 453 (1946). It is generally in management's interest that the financial statements reflect performance in the most favorable light. There is an inherent divergence of interests between management and third persons who will rely upon these statements. Without the auditor's oversight, management might be tempted to tilt certain items in its favor or to commit outright misrepresentation. The Legislature has expressed its concern for the competence of accountants by enacting the Public Accounting Act of 1977, which requires that public accountants be certified or registered upon fulfilling certain standards. N.J.S.A. 45:2B-1 to -37. The declared legislative purpose of the Act is to promote the dependability of information which is used for guidance in financial transactions or for accounting for or assessing the status or performance of commercial and noncommercial enterprises, whether public or private. The public interest requires that persons attesting, as experts in accounting, to the reliability or the fairness of presentation, of such information be qualified in fact to do so; that a public authority competent to prescribe and assess the qualifications of public accountants be established; and that the attestation of financial information by persons professing expertise in accounting be reserved to persons who demonstrate their ability and fitness to observe and apply the standards of the accounting profession. [N.J.S.A. 45:2B-2] 348 The objection to imposing a duty on accountants to third persons to whom the statements have been given by the company for proper business purposes is the spectre of financial catastrophe. It is feared that the unknown costs will be so severe that accounting firms will not be able to absorb the losses that will be visited upon them, particularly because in all likelihood the audited clients will be judgment proof or unable to satisfy their share of the indebtedness due. The reasonableness of this concern is questionable. Many who would benefit from the rule that an auditor owes a duty of reasonable care to those to whom the company may foreseeably deliver the audit are now protected. Accounting firms are presently liable to purchasers of securities in public offerings when they have misstated a material fact in the financial statements. Securities Act of 1933, 15 U.S.C.A. § 77k (1981). It is interesting to compare the elements constituting liability under the Securities Act of 1933 with the traditional negligence (non-privity) standard. Accountants' liability under Section 11 is often available where an action for ordinary negligence would not succeed. Under section 11 the plaintiff need not prove scienter, negligence, or proximate cause; the burden of proof is on the accountants to establish freedom from negligence or "due diligence." See generally Herman & MacLean v. Huddleston, ___ U.S. ___, ___, 103 S.Ct. 683, 687, 74 L.Ed.2d 548, 555 (1983). Section 18 of the Securities Exchange Act of 1934 creates a civil liability for any person who causes a misleading statement to be made in any report filed with the SEC under the 1934 Act. 15 U.S.C.A. 78r. The plaintiff must prove reliance and the defendant is not responsible if "he acted in good faith and had no knowledge that such statement was false or misleading." Under those statutes privity is not a defense and accountants may have substantial liabilities to third persons. Escott v. Bar Chris Construction Corp., 283 F. Supp. 643 (S.D.N.Y. 1968) (auditor liability under Section 11 of Securities Act of 1933); Fischer v. Kletz, 266 F. Supp. 180 (S.D.N.Y. 1967) (auditor liability under Section 18 of the Securities Exchange 349 Act); see generally, Ernst & Ernst v. Hochfelder, 425 U.S. 185, 207-11, 96 S.Ct. 1375, 1387-89, 47 L.Ed.2d 668, 684-87 (1976).[10] Even under the rule of Ultramares accounting firms are liable, irrespective of privity, to all third persons for fraud and gross negligence that raises an inference of fraud. Ultramares, 174 N.E. at 448-49; see also Merit Ins. Co. v. Colao, 603 F.2d 654, 657-58 (6th Cir.1979) (applying Illinois law), cert. denied, 445 U.S. 929, 100 S.Ct. 1318, 63 L.Ed.2d 763 (1980); State Street Trust Co. v. Ernst, 278 N.Y. 104, 112, 15 N.E.2d 416, 418-19 (1938); Duro Sportswear v. Cogen, 131 N.Y.S.2d 20 (1954), aff'd, 285 App.Div. 867, 137 N.Y.S.2d 829 (1955). Independent auditors have apparently been able to obtain liability insurance covering these risks or otherwise to satisfy their financial obligations. We have no reason to believe that they may not purchase malpractice insurance policies that cover their negligent acts leading to misstatements relied upon by persons who receive the audit from the company pursuant to a proper business purpose.[11] 350 The imposition of a duty to foreseeable users may cause accounting firms to engage in more thorough reviews. This might entail setting up stricter standards and applying closer supervision, which should tend to reduce the number of instances in which liability would ensue. Much of the additional costs incurred either because of more thorough auditing review or increased insurance premiums would be borne by the business entity and its stockholders or its customers. The extent of financial exposure has certain built-in limits. The plaintiffs would have to establish that they received the audited statements from the company pursuant to a proper company purpose, that they, in accordance with that purpose, relied on the statements and that the misstatements therein were due to the auditor's negligence and were a proximate cause of the plaintiff's damage.[12] The injured party would be limited to recovery of actual losses due to reliance on the misstatement.[13] Negligence of the injured party could bar or limit the 351 amount of recovery under the Comparative Negligence Act. N.J.S.A. 2A:15-5.1. The accounting firm could seek indemnification or contribution from the company and those blameworthy officers or employees. The auditors could in some circumstances, such as when auditing a privately owned company, expressly limit in their certificates the persons or class of persons who would be entitled to rely upon the audit. Some commentators recognize that a "factor which may limit the foresight of reasonable reliance is the presence of a disclaimer of responsibility attached to the information." Stanton & Dugdale, "Recent Developments in Professional Negligence II: Accountant's Liability to Third Parties," 132 New L.J. 5 (1982). See also Hedley Byrne & Co. v. Heller Partners [1964] AC 54, [1963] 2 All E.R. 575 (holding disclaimer was effective). In the final analysis the injured party should recover damages due to an independent auditor's negligence from that auditor. This would shift the loss from the innocent creditor or investor to the one responsible for the loss. Accountants will also be encouraged to exercise greater care leading to greater diligence in conducting audits. See 44 Wash.L.Rev. at 177 (stating that "[a]lthough courts may be the poorest forum in which to formulate standards, civil liability is probably the most effective means ... of providing a sufficient incentive for the profession to undertake further self-regulation"). Similar thoughts were expressed in Rusch Factors, Inc. v. Levin: Why should an innocent reliant party be forced to carry the weighty burden of an accountant's professional malpractice? Isn't the risk of loss more easily distributed and fairly spread by imposing it on the accounting profession, which can pass the cost of insuring against the risk onto its customers, who can in turn pass the cost onto the entire consuming public? Finally, wouldn't a rule of foreseeability elevate the cautionary techniques of the accounting profession? For these reasons it appears to this Court that the decision in Ultramares 352 constitutes an unwarranted inroad upon the principle that "[t]he risk reasonably to be perceived defines the duty to be obeyed." Palsgraf v. Long Island R.R., 248 N.Y. 339, 344, 162 N.E. 99, 100, 59 A.L.R. 1253. [284 F. Supp. 85, 91 (D.R.I. 1968) (applying Rhode Island law) (dictum)] Recently Justice Wiener, in his article "Common Law Liability of the Certified Public Accountant for Negligent Misrepresentation," concluded: The time has come to absolve the negligent accountant of this anachronistic protection. Accountant liability based on foreseeable injury would serve the dual functions of compensation for injury and deterrence of negligent conduct. Moreover, it is just and rational judicial policy that the same criteria govern the imposition of negligence liability, regardless of the context in which it arises. The accountant, the investor and the general public will in the long run benefit when the liability of the certified public accountant for negligent misrepresentation is measured by the foreseeability standard. [20 San Diego L.Rev. 233, 260 (1983)] When the independent auditor furnishes an opinion with no limitation in the certificate as to whom the company may disseminate the financial statements, he has a duty to all those whom that auditor should reasonably foresee as recipients from the company of the statements for its proper business purposes, provided that the recipients rely on the statements pursuant to those business purposes.[14] The principle that we have adopted applies by its terms only to those foreseeable users who receive the audited statements from the business entity for a proper business purpose to influence a business decision of the user, the audit having been made for that business entity. Thus, for example, an institutional investor or portfolio manager who does 353 not obtain audited statements from the company would not come within the stated principle. Nor would stockholders who purchased the stock after a negligent audit be covered in the absence of demonstrating the necessary conditions precedent. Those and similar cases beyond the stated rule are not before us and we express no opinion with respect to such situations. Certified financial statements have become the benchmark for various reasonably foreseeable business purposes and accountants have been engaged to satisfy those ends. In those circumstances accounting firms should no longer be permitted to hide within the citadel of privity and avoid liability for their malpractice. The public interest will be served by the rule we promulgate this day. V A. The 1971 Audit Both the trial court and the Appellate Division ruled that the plaintiffs' claim based on negligent preparation of the 1971 audit could not be sustained because the accountants were not aware at the time the audit was prepared of the existence of the plaintiffs or of a limited class of which the plaintiffs were members. The defendant's audit had been completed on April 16, 1971 and Giant's merger discussions with the plaintiff did not begin until the following September.[15] Therefore the defendants had no knowledge of the Rosenblums or the prospective merger at the time of the preparation of the audit and there could be no liability under Ultramares or the Restatement. It may be contended under one view of the evidence that the defendants knowingly permitted and authorized plaintiffs' use of the 1971 audit. In doing so, they were aware that the plaintiffs would rely on that audit. Under these circumstances, 354 the defendants implicitly represented to the plaintiffs, as they had represented in their certificate to Giant, that defendants had examined the 1971 statements of earnings and balance sheet "in accordance with generally accepted auditing standards" and that the financial statements "present[ed] fairly" Giant's financial position. There is evidence that the plaintiffs relied on these financial statements. It was also reasonably inferable that the audit had been made carelessly and negligently, resulting in false statements and in the plaintiffs' loss. Defendants' presence and participation in the merger proceedings were not gratuitous. Any representations were made by defendants on behalf of their client Giant. Liability would be sustainable under the traditional rationale of Glanzer v. Shepard, supra, and Economy B. & L. Ass'n v. West Jersey Title Co., supra. However, the facts supporting this position are somewhat attenuated. We are not unmindful that R. 4:46-2 provides that summary judgment shall be entered when "there is no genuine issue as to any material fact challenged." Implicated is the policy consideration that "protection is to be afforded against groundless claims" to save the expenses of protracted litigation and "reserve judicial manpower and facilities." Robbins v. Jersey City, 23 N.J. 229, 241 (1957); see also United Rental Equip. Co. v. Aetna Life & Cas. Ins. Co., 74 N.J. 92, 99 (1977). We therefore deem it appropriate to apply the somewhat broader principle enunciated above because the trial court may be faced with this issue at the trial. In adopting that position we are aware of the observation of Chief Justice Weintraub in Busik v. Levine, 63 N.J. 351, 363, appeal dismissed for want of substantial federal question, 414 U.S. 1106, 94 S.Ct. 831, 38 L.Ed.2d 733 (1973), that "[w]hether an issue will be dealt with narrowly or expansively calls for a judge's evaluation of many things, including the need for guidance for the bar or agencies of government or the general public." See also Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 502 (1974). 355 When the defendants prepared the Giant audit, they knew or should have known that Giant would probably use the audited figures for many proper business purposes. They knew that it was to be incorporated in Giant's annual report, a report that would be transmitted to each Giant stockholder, and would be filed with the SEC in conjunction with Giant's proxy solicitation material for its annual stockholder meeting.[16] The defendants also knew or should have known that the audited financial statements would be available and useful for other proper business purposes, such as public offerings of securities, credit, and corporate acquisitions. These were clearly foreseeable potential uses of the audited financials at the time of their preparation. Giant and the defendant auditors knew that these financial statements would be used at least until the next financial statements had been audited and released. Defendants became aware of plaintiffs' existence and their intended use of these statements before the plaintiffs relied on the accuracy of these financials. The defendants knew that the merger agreement included a representation that the prospectus used for the public offering in December 1971 contained no untrue statement of a material fact and did not omit to state any material fact. The defendants knew that this prospectus included their opinion that the financials had been prepared in accordance with generally accepted accounting principles and fairly presented Giant's financial condition. The defendants' representations were of a continuing nature and their obligation was a continuing one. See Fischer v. Kletz, 266 F. Supp. 180 (S.D.N.Y. 1967) (accountants discovering inaccuracy after audit was released held under duty to disclose after-acquired information). 356 Defendants' ignorance of the precise use to which the statements would be put does not eliminate their obligation. Applying the principle previously stated, we find first that it is necessary only that Giant, the entity for whom the audit was being made, used it for a proper business purpose. There was no limitation in the accountants' opinion. They could reasonably expect that their client would distribute the statements in furtherance of matters relating to its business. Having inserted the audit in that economic stream, the defendants should be responsible for their careless misrepresentations to parties who justifiably relied upon their expert opinions. On the motion for summary judgment the facts viewed favorably from the plaintiffs' perspective are that the defendants negligently prepared their audit of Giant's financial statements reflecting Giant's operations for the twelve months ending January 30, 1971 and its financial status on that date. These statements were subsequently delivered by Giant, in furtherance of its business, to the plaintiffs for their consideration in determining whether to sell their enterprises to Giant, whether to accept Giant stock and how much stock to seek. Indeed, the defendants became aware of the fact that these financials had been delivered to the plaintiffs in connection with the proposed merger. The plaintiffs, allegedly relying upon the defendants' express representations, entered into the merger agreement which was subsequently consummated. As a result, plaintiffs claim to have suffered damages. Under these circumstances, the courts below erred in striking the cause of action predicated on the negligent auditing of the financial data for the year ending January 30, 1971. B. The 1972 Audit The trial court denied defendants' motion to dismiss the plaintiffs' claims of fraud and negligence ascribable to the 1972 audit. The defendants contend that the plaintiffs had already signed and were bound by the merger contract executed on 357 March 9, 1972 at the time the audit was issued in April 1972. Therefore, the defendants argue that there could be no causal relationship between defendants' alleged fraud and negligence and the plaintiffs' damage. However, the merger agreement contained a Giant representation and warranty that there would be no material adverse change in its business, property or assets at the time of the closing. We cannot say on this record that disclosures of the true Giant situation exposed by a non-negligent audit would not have justified the plaintiffs' refusal to consummate the deal. There is a factual dispute over whether the plaintiffs relied on the 1972 audit. We do note that there is evidence in the depositions that the plaintiffs expected to receive the 1972 audited figures before the closing and would have refused to consummate the transaction if these data had reflected a material adverse change in Giant's business. Moreover, adequate disclosures might have exposed a fraud on the part of Giant that would have justified rescission of the contract. A contractual obligation alone does not require one to close a financially disastrous transaction when valid grounds exist to disavow the contract. Irrespective of whether the defendants had actual knowledge of Giant's proposed use of the 1972 audit in connection with the merger, it was reasonably foreseeable that Giant would use the audited statement in connection with the merger and its consummation. This is particularly so since the defendants were familiar with the merger agreement and had been engaged by Giant to audit the books and records of the plaintiffs' enterprises for the purpose of the merger. The trial court properly denied defendants' motion. The judgment granting defendants' motion for partial summary judgment with respect to the 1971 financial statements is reversed and that denying defendants' motion for partial summary judgment with respect to the 1972 financial statements is affirmed. The cause is remanded to the trial court for further proceedings consistent with this opinion. *358 For reversal and remandment Chief Justice WILENTZ and Justices CLIFFORD, SCHREIBER, HANDLER, POLLOCK, O'HERN and GARIBALDI 7. For affirmance None. NOTES [1] The SEC found that Touche's audit for the 1972 statements did not meet the requirements of the accounting profession. The SEC entered a consent order of censure against Touche. In re Touche Ross & Co., Securities Exchange Act Release No. 15978, Fed.Sec.L.Rep. (CCH) ¶ 72, 175A (1979). [2] Interestingly, Chief Justice Beasley found support for his holding in the strict privity requirements of products liability law. We consider below how changes in that field might lead one to a different conclusion. [3] Cf. Coleco Industries, Inc. v. Berman, 423 F. Supp. 275, 303 (E.D.Pa. 1976), appeal on this issue dismissed as moot, 567 F.2d 569 (3d Cir.1977), cert. denied, 439 U.S. 830, 99 S.Ct. 106, 58 L.Ed.2d 124 (1978) (applying N.J. law) (concluding that lack of privity did not preclude a claim against accountants who knew that the claimants were to benefit from the audit). [4] Indeed, privity is not required for recovery in strict products liability in tort. Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 57 (1965); Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358 (1960). [5] Consistent with its holding in Henningsen, this Court has permitted an action for failure to warn in a strict products liability case without privity. That failure could constitute the omission to state a material fact that would render the statement as made misleading. Freund v. Cellofilm Properties, Inc., 87 N.J. 229, 243 (1981) (warning to be sufficient must communicate information essential to make the use of a product safe). [6] A number of jurisdictions have adopted the approach set forth in Santor, but permitting recovery in tort for economic loss in such cases is not as yet the majority rule. See cases cited in Pennsylvania Glass Sand v. Caterpillar Tractor Co., 652 F.2d 1165, 1171 n. 17 (3d Cir.1981) (applying Pennsylvania law). The leading case holding that economic loss is not recoverable is Seely v. White Motor Co., 63 Cal.2d 9, 45 Cal. Rptr. 17, 403 P.2d 145 (1965). [7] Similarly, the Securities and Exchange commission requires that the auditor's examination be made in accordance with generally accepted auditing standards. As amended in Release No. AS-195, Reg. § 210.2-02, 41 Fed.Reg. 35479 (1976). [8] New York Stock Exchange Co. Manual § A67-78, 24.13, 24.24. [9] The Securities Act of 1933 requires that the prospectuses filed with respect to public offerings of securities include certified financial statements. 15 U.S.C.A. §§ 77g, aa (1981). Many companies must file an annual report, Form 10-K, containing certified financial statements within 90 or 120 days of the end of each fiscal year. The Securities Exchange Act of 1934 requires that independent certified financial statements be included in annual reports, which must be filed by almost all companies having assets of at least $1,000,000 and 500 holders of a class of equity securities. 15 U.S.C.A. § 78(1) (g)(1) (1981). [10] Proof of intent to deceive or defraud is also the primary element necessary for liability under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. 78j(b). See Herman & MacLean v. Huddleston, ___ U.S. at ___, 103 S.Ct. at 688, 74 L.Ed.2d at 556. An accountant can be held liable for the same conduct under section 10(b) and under section 11 of the 1933 Act. Id. ___ U.S. at ___, 103 S.Ct. at 690, 74 L.Ed.2d at 559. [11] Accountants have been able to obtain insurance covering their liability under the securities laws. While such liability is imposed under different circumstances, it is often easier to establish and can be similar in amount to that imposed here. In 1976, a survey taken by the Practicing Law Institute indicated that accounting firms had little difficulty in obtaining insurance at a reasonable cost. One insurance plan is "sponsored monthly by the American Home Insurance Company and the Federal Insurance Company, the American Home writing the initial coverage, with the Federal taking the excess coverage." Practicing Law Institute, Tax Law and Practice. Transcript Series, No. 4, Accountants' Liability (J. McCord ed. 1969). Moreover, a new insurance program sponsored by AICPA covers all claims against the insured including defense costs, except those involving intentional fraud. See Levine & Marks, Accountants' Liability Insurance Perils and Pitfalls, J. Accountancy, Oct. 1976, at 59, 60. The accountant is insured for liabilities up to five million dollars, and the plan is designed for firms with staffs of less than 250 people. Rollins Burdick Hunter, AICPA Professional Liability Insurance Plan (1979) (on file with Fordham Law Review). Like all insurance policies, these liability policies offer the accounting profession the advantage of risk-spreading. [48 Fordham L.Rev. at 415, n. 81] See also 5 Nat'l L.J. 1 (1983). At oral argument defendants contended that the cost of insurance to cover the claims of all foreseeable users of audits would be catastrophic. Suffice it to say that defendants have not alerted us to data either within or outside the record to support this position. [12] In Toromont Industrial Holdings Ltd. v. Thorne, Gunn, Helliwell & Christenson [1976] 62 D.L.R.(3d) 225, [1976] 73 D.L.R.(3d) 122, the Ontario High Court found that the negligent audit was not the cause of the plaintiffs' take-over bid, that is, that the plaintiffs would have made the purchase anyway. The Ontario Court of Appeals found that the negligent audit had damaged the plaintiffs to the extent that they were forced to incur the cost of preparing a new audit. [13] It is the actual loss suffered, not the benefit of the bargain, that the plaintiff may gain as recovery. See Scott Group Ltd. v. McFarlane [1978] 1 N.Z.L.R. 553 (opinion of Cooke, J.) [New Zealand]; West Coast Finance Ltd. v. Gunderson, Stokes, Walton & Co. [1974] 44 D.L.R.(3d) 232, [1975] 56 D.L.R.(3d) 460 [Canada]. [14] A similar thought was expressed by Judge Woolf in JEB Fasteners Ltd. v. Marks, Bloom & Co. [1981] 3 All E.R. 289, 296 [Queen's Bench, England], who endorsed the view that auditors should be liable to those who foreseeably and reasonably rely on their representations of the financial position of the audited entity. Judge Woolf agreed with another jurist who found it "paradoxical that no duty of care should be owed to those who can be foreseen likely to sustain damage if carelessness existed, but that a duty of care should be owed to those, their clients, in respect of whom there is no foreseeable risk of damage" when the defalcation is due in the first instance to the client. Id. at 296. [15] The same audit report was used in the prospectus and registration statement covering 360,000 shares of Giant common stock offered on December 14, 1971. [16] The audit was necessary in conjunction with the SEC Form 10-K. This had to be filed within 90 or 120 days after the end of Giant's fiscal year on January 30, 1971.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2521342/	14 Cal. Rptr. 3d 870 (2004) 92 P.3d 360 33 Cal. 4th 321 The PEOPLE, Plaintiff and Respondent, v. Gaylon Michael MAJORS, Defendant and Appellant. No. S113086. Supreme Court of California. July 1, 2004. Rehearing Denied August 11, 2004. 871 Patricia J. Ulibarri, San Diego, under appointment by the Supreme Court, for Defendant and Appellant. Bill Lockyer, Attorney General, Robert R. Anderson, Chief Assistant Attorney General, Gary W. Schons, Assistant Attorney General, Barry J.T. Carlton, Steven T. Oetting and Daniel Rogers, Deputy Attorneys General, for Plaintiff and Respondent. 872 BROWN, J. A victim enters the defendant's vehicle under an implicit threat of arrest. Does this evidence satisfy the force or fear element of simple kidnapping? (Pen.Code, § 207, subd. (a) (hereafter section 207(a)).)[1] We conclude it does, and therefore reverse the judgment of the Court of Appeal. I. FACTUAL AND PROCEDURAL BACKGROUND On August 15, 2000, 18-year-old Alesandria M. was riding home on her bicycle. She was an employee at the Zany Brainy store at Mira Mesa Market Center. Earlier that day, Alesandria had purchased a gift at Zany Brainy for her brother's birthday. Just prior to starting home, Alesandria returned to Zany Brainy and made a second purchase. After Alesandria had been riding for approximately 10 to 15 minutes, defendant Gaylon Michael Majors, wearing sunglasses and standing in the street next to a white van, flashed a badge and asked her to stop. He told her he was a security guard at the Mira Mesa mall and had received a call saying someone on a bicycle was suspected of a theft at the Zany Brainy store. Alesandria got off her bike and showed defendant the items in her backpack, her payment receipts, and her identification. Defendant told Alesandria she would have to return with him to the store and speak to the security guard to resolve the issue. He tried to put her bike in the van, but it did not fit, so he "said to go ahead and lock my bike up at the school right across the street." While Alesandria did so, defendant took her backpack and put it in the van. When she returned to the van, Alesandria asked to see defendant's badge again. While defendant was not in uniform, Alesandria testified that "I felt scared that maybe if he was undercover or something like that that I would get in more trouble. So I took his badge again. I was not really sure what to look for." The badge said "security guard" on it. On the other side of the badge was an orange laminated card. Alesandria did not ride off because she "was really scared that if . . . he was who he said he was, that I would be in jail, that I would have to explain to my parents why I was there, even though I knew inside that I was innocent of stealing." Alesandria testified she was afraid she would be arrested if she did not get into the van. She believed defendant had the authority to arrest her because he displayed a badge and identified himself as a security officer. Alesandria had never dealt with the police before, and was afraid not to get in the van. She testified, "I believed what he said about being a security guard and that we would have to go back to the . . . mall, to clear things up. And I actually worked at Zaney Brainey [sic], so I was confident about getting the manager to clear everything up for me." "He told me I would have to go with him." "I requested to see his badge because I didn't believe him. But at the same time I didn't want to not believe him if he was telling the truth. I didn't want to make a situation worse than it had already been." Defendant did not do anything to cause her to be afraid for her safety before she got into the van. He did not display any weapons, threaten, or touch Alesandria until they parked at the mall. Once Alesandria and defendant were in the van, defendant appeared to make a call on his cell phone. "He made it sound like maybe he was talking to a partner or somebody, saying that the suspect was apprehended." Alesandria asked if she 873 could call her parents. Defendant told her "that we could once we got there." Once they arrived at the mall, defendant said "they were going to have to check with the manager to see if they could look at their cameras." This caused Alesandria apprehension apparently because she knew from her employment there were no cameras at Zany Brainy. Defendant ultimately drove to an isolated area of the mall. Alesandria started to get out of the van, but defendant grabbed her by the hair and slammed her head into the passenger side window. He then pulled back her hair so she was facing him, told her to go to the back of the van, and said he would not hurt her. Alesandria grabbed for defendant's throat, but defendant grabbed her head again, and tried to force her head between her legs. He ultimately threw her into a bench seat in the back of the van, and told her if she cooperated he would not hurt her. He then straddled her, pinning her arms to her chest, and struck her twice on the side of her head saying, "I don't want to be mean to you, so just do what I say." Alesandria was screaming and crying, and kicking defendant. Defendant asked Alesandria if she wanted to die, and she said yes. Defendant said, "Okay, you are going to die." Alesandria continued to kick defendant, and he eventually released her, saying, "Get out bitch." Alesandria reported the matter to a security guard and the police. Defendant's fingerprint was found on one of Alesandria's Zany Brainy purchase receipts. Defendant was also positively identified at trial by a woman who lived at the location where defendant initially stopped Alesandria. On the day of his arrest, defendant was seen driving a white van. When arrested, he was in possession of a canvas briefcase containing an orange laminated card, sunglasses, binoculars, a digital camera, and a dildo. The jury was instructed that both kidnapping for rape and simple kidnapping required proof beyond a reasonable doubt that Alesandria "was unlawfully moved by the use of physical force or by any other means of instilling fear," and that her movement was "without her consent." "Consent" was defined as "act[ing] freely and voluntarily and not under the influence of threat, force, or duress. . . . Consent requires a free will and positive cooperation in act or attitude." With respect to the crimes against Alesandria,[2] defendant was convicted of kidnapping for rape (§ 209, subd. (b)(1)), simple kidnapping (§ 207(a)),[3] assault with the intent to commit rape (§ 220), and false imprisonment by violence and menace (§§ 236, 237, subd. (a)). A divided Court of Appeal reversed defendant's convictions for kidnapping and kidnapping for rape for insufficiency of the evidence regarding the element of force or fear. The majority stated, "This case appears to be a classic case of asportation by fraud, not by force or fear." In all other respects as to the crimes against Alesandria, the judgment was affirmed. We granted the Attorney General's petition for review to consider whether evidence that a victim entered a defendant's 874 vehicle under threat of arrest is sufficient to satisfy the force or fear element of section 207(a) kidnapping. II. DISCUSSION Section 207(a) provides, "Every person who forcibly, or by any other means of instilling fear, steals or takes, or holds, detains, or arrests any person in this state, and carries the person into another . . . county, or into another part of the same county, is guilty of kidnapping." The language "any other means of instilling fear" was added in 1990. (Stats.1990, ch. 55, § 1, p. 393.) Section 207(a) expressly "do[es] not apply to . . .:[¶] . . . [¶] . . . any person acting under Section 834[[4]] or 837."[5] (§ 207, subd. (f)(2).) As can be seen by this language, in order to constitute section 207(a) kidnapping, the victim's movement must be accomplished by force or any other means of instilling fear. We have observed that even prior to the 1990 amendment adding the language "any other means of instilling fear," our cases held "that a taking is forcible if accomplished through fear." (People v. Hill (2000) 23 Cal. 4th 853, 856, 98 Cal. Rptr. 2d 254, 3 P.3d 898 & fn. 2 (Hill).) As these earlier cases explain, the force used against the victim "need not be physical. The movement is forcible where it is accomplished through the giving of orders which the victim feels compelled to obey because he or she fears harm or injury from the accused and such apprehension is not unreasonable under the circumstances." (People v. Stephenson (1974) 10 Cal. 3d 652, 660, 111 Cal. Rptr. 556, 517 P.2d 820 (Stephenson); People v. Camden (1976) 16 Cal. 3d 808, 814, 129 Cal. Rptr. 438, 548 P.2d 1110 [section 207(a) "encompasses any movement of a victim which is substantial in character [citation], and accomplished by means of force or threat of force"]; People v. Guerrero (1943) 22 Cal. 2d 183, 189, 137 P.2d 21 [the gravamen of the offense of kidnapping is "some form of compulsion"]; People v. Dagampat (1959) 167 Cal. App. 2d 492, 495, 334 P.2d 581 (Dagampat) ["The requisite force or compulsion need not consist of the use of actual physical force or of express threats"].) We have also observed that the concepts of consent and force or fear "are clearly intertwined." (In re Michele D. (2002) 29 Cal. 4th 600, 609, 128 Cal. Rptr. 2d 92, 59 P.3d 164 (Michele D.) [addressing force]; Hill, at p. 855, 98 Cal. Rptr. 2d 254, 3 P.3d 898 [kidnapping generally must be "against the will of the victim, i.e., without the victim's consent"].) These alternative bases for committing kidnapping, i.e., "forcibly, or by any other means of instilling fear," while stated in the disjunctive, are not mutually exclusive. As noted, prior to the 1990 addition of the language "any other means of instilling fear," we had held that threats of force satisfy the force element of section 207(a). Given the similarity between a "threat of force" and "any other means of instilling fear," there are inevitably now circumstances that constitute both force and fear within the meaning of this statute. As the Attorney General notes, "the mechanism by which a threat of force produces 875 the movement of the victim necessary for a kidnapping is fear, specifically, the fear that the threat of force will be carried out." In contrast to the use of force or fear to compel asportation, "asportation by fraud alone does not constitute general kidnapping in California." (People v. Davis (1995) 10 Cal. 4th 463, 517, fn. 13, 41 Cal. Rptr. 2d 826, 896 P.2d 119; People v. Green (1980) 27 Cal. 3d 1, 64, 63, 164 Cal. Rptr. 1, 609 P.2d 468 ["defendant tricked [victim] into believing she was simply being taken on a quick trip to her sister's house and back"], overruled on other grounds in People v. Martinez (1999) 20 Cal. 4th 225, 239, 83 Cal. Rptr. 2d 533, 973 P.2d 512 and People v. Hall (1986) 41 Cal. 3d 826, 834, fn. 3, 226 Cal. Rptr. 112, 718 P.2d 99.) This long-standing rule is premised on the language of section 207, which for general kidnapping, at issue here, requires asportation by force or fear, but for other forms of kidnapping proscribes movement procured only by "fraud," "entice[ment]," or "false promises." (§ 207, subds.(a)-(d); see People v. Stanworth (1974) 11 Cal. 3d 588, 602-603, 114 Cal. Rptr. 250, 522 P.2d 1058, overruled on other grounds in Martinez, at p. 237, 83 Cal. Rptr. 2d 533, 973 P.2d 512; People v. Rhoden (1972) 6 Cal. 3d 519, 526-527, 99 Cal. Rptr. 751, 492 P.2d 1143.) Thus, in Stephenson, supra, 10 Cal. 3d 652, 111 Cal. Rptr. 556, 517 P.2d 820, we reversed two kidnapping convictions. (Id. at pp. 659-660, 662, 111 Cal. Rptr. 556, 517 P.2d 820.) In one, the victim entered the vehicle voluntarily because he thought it was a taxi. (Id. at p. 656, 111 Cal. Rptr. 556, 517 P.2d 820.) In the other, the victim accepted a ride from a stranger. (Id. at p. 657, 111 Cal. Rptr. 556, 517 P.2d 820.) We concluded the victims "were enticed to get voluntarily into defendant's car by deceit or fraud." (Id. at p. 659, 111 Cal. Rptr. 556, 517 P.2d 820.) By contrast, in People v. La Salle (1980) 103 Cal. App. 3d 139, 143, 146, 162 Cal. Rptr. 816 (disapproved on other grounds in People v. Kimble (1988) 44 Cal. 3d 480, 496, fn. 12, 498, 244 Cal. Rptr. 148, 749 P.2d 803), the victim entered the car not voluntarily, but because the defendant had her two-and-a-half-year-old daughter in the car, and could have driven away with her. While "she was afraid to get into the car, she was more afraid not to get in, because of what could happen to her daughter . . . . [S]he felt she had no choice but to cooperate. The jury was entitled to conclude that this was not a case of inducement by fraud or deceit, but one wherein the victim was forced to consent to defendant's demands." (La Salle, at p. 146, 162 Cal. Rptr. 816, original italics; Dagampat, supra, 167 Cal.App.2d at p. 495, 334 P.2d 581 ["court could reasonably have found that [victim] did not willingly enter the car, but did so because of a fear of bodily harm induced by [one defendant's] order to get into the convertible, defendants' `dirty looks,' the sudden approach of [another member of defendants' group] from the drugstore, and his recollection of the fight in which" the other defendant stabbed a different victim].) Of course, it goes without saying that asportation may be accomplished by means that are both fraudulent and involve force or fear. For example, a defendant who claims to have a gun but who in fact does not could not successfully argue he induced the movement of the victims who credited his statement solely by fraud. The question in this case is whether movement accomplished by the implicit but false threat of arrest satisfies the elements of force or fear in section 207(a), or whether such movement is simply asportation by fraud. While not addressing the 876 precise factual scenario presented here, kidnapping cases involving fraudulent arrest date back over a century. In People v. Fick (1891) 89 Cal. 144, 147, 152-153, 26 P. 759, we distinguished Ex Parte Sternes (1889) 82 Cal. 245, 23 P. 38, in which a deputy sheriff lawfully executed an arrest warrant, and upheld the kidnapping conviction of the defendant constable. In Fick, the defendant arrested the victim, but then took her to a house of "ill-fame." (Fick, at p. 147, 26 P. 759.) We observed that the language of former section 207[6] "necessarily implies that the arrest and conveying to another county must be without the consent of the person injured, and without any lawful authority therefor. . . ." (Fick, at p. 150, 26 P. 759.) In response to the defendant's contention that his action was not kidnapping because "he was acting under a warrant," we stated, "it is not unreasonable to believe that [defendant], when he made the arrest, intended to do with his prisoner just what the evidence shows that he did do, and that he had no other purpose. In other words, that her arrest was simply a means to the end he had in view; that he never intended to take her before a magistrate, but did intend to place her [at the house of ill-fame]. Such an act was unlawful, and as the warrant under which [defendant] claims that he acted never authorized such a proceeding, it affords no justification for the act now under consideration." (Id. at pp. 150-152, 26 P. 759.) Because it was not at issue, we did not describe in Fick what force was used to effectuate the arrest. In People v. Broyles (1957) 151 Cal. App. 2d 428, 429, 311 P.2d 88, the defendants spotted a car parked in an isolated area. It was occupied by a man and a woman. Defendant Broyles turned a flashlight into the car "and told the occupants that he was a special deputy sheriff patrolling the back roads, that what they were doing was wrong, and that he would have to take them in." (Ibid.) He asked to see the man's driver's license. Broyles then sent codefendant Gully back to their car to see if the couple "had a record and if the car was stolen." (Ibid.) Gully came back saying there was no record and the car was not stolen. Broyles told the man he would have to take the woman "down to the station." (Ibid.) The woman entered the defendants' car "believing that these were police officers." (Ibid.) Gully later made a statement that during the drive "he could hear crying in the back seat and could hear `somebody getting hit.'" (Id. at p. 430, 311 P.2d 88.) The Court of Appeal rejected Gully's claim of insufficient evidence and upheld his kidnapping conviction, stating, "There was ample evidence that the victim . . . was induced to enter the car driven by [Gully] by the representations made by these parties that they were police officers; that she believed these representations, and acted through fear; that they forced her into their car by giving orders which she felt compelled to obey; and that some force was used while she was being transported over a space of several miles. The evidence is sufficient to show the crime of kidnaping." (Id. at pp. 430-431, 311 P.2d 88.) In People v. Harris (1944) 67 Cal. App. 2d 307, 308-309, 154 P.2d 442, the defendant stated to two 15-year-old boys, William and Henry, that he had been sent by the Dallas County Sheriff to get a particular boy. When William asked the defendant if he had any identification demonstrating he was an officer, the defendant said, "`"Never mind,"'" and that they "`must 877 go and get in the car.'" (Id. at p. 309, 154 P.2d 442.) When William started to walk away from the car, the defendant said, "`"If you don't want a damned broken leg you had better come back here, boy."'" (Ibid.) Defendant ultimately said he had to take Henry "`"down". . . . "If you are not the one, . . . I will bring you home or see you get back home."'" (Id. at pp. 309-310, 154 P.2d 442.) Henry testified, "`I thought that he was a plain clothes police officer, and I was kind of afraid. . . . Then I got in the car.'" Henry was subsequently sexually assaulted, and the defendant convicted of kidnapping and oral copulation. (Id. at pp. 307, 310, 154 P.2d 442.) The Court of Appeal in Harris observed that while the defendant "makes no argument and cites no authority in support of the claim that his conviction of the crime of kidnaping is unsupported by the evidence, we feel that such claim is effectually refuted by the recent case of People v. Brazil (1942) 53 Cal. App. 2d 596, 128 P.2d 204. There, a gun was exhibited and the complaining witness was told to get into the automobile because the defendant was going to take her to the police station. While no gun was displayed in the instant case, the orders of the defendant were carried out under fear induced by oral threats. Henry testified, when asked whether he got into the car willingly: `Well, he threatened my friend and I thought that he was a plain clothes police, and so I got in the car to keep from having any trouble, because I didn't want to get in any trouble with no police.'" (People v. Harris, supra, 67 Cal.App.2d at p. 310, 154 P.2d 442.) As can be seen, none of these cases directly hold that an implicit threat of arrest satisfies the force element of the kidnapping statute. In Fick, the force used to effectuate the arrest was not described. However, nothing in that case suggests that in order to constitute kidnapping, the arrest had to involve anything other than an assertion the victim was required to accompany the officer. In Broyles, it is unclear whether the Court of Appeal concluded the totality of the evidence was sufficient to demonstrate kidnapping, or whether it had alternative bases for its holding, i.e., that the evidence demonstrated kidnapping both when the victim entered the car because of orders from apparent police officers she felt compelled to obey, and when force was later applied during the asportation. In Brazil, a gun was used in effectuating the "arrest." And in Harris, prior to the victim's entry into the defendant's vehicle, the defendant threatened to break the leg of the victim's companion if he ran away. Nevertheless, defendant fails to cite a single case in which asportation accomplished by the threat of arrest was found to be movement motivated solely by fraud. Indeed, implicit in the language of section 207, subdivision (f)(2), which creates an exception to the kidnapping statute for lawful arrest by a peace officer or a private person, is the Legislature's understanding that unlawful arrest may, under certain circumstances, be a form of kidnapping. As we have observed in a somewhat different context, "[p]olice officers occupy a unique position of trust in our society. . . . They are given the authority to detain and to arrest. . . . Those who challenge an officer's actions do so at their peril. . . ." (Mary M. v. City of Los Angeles (1991) 54 Cal. 3d 202, 206, 285 Cal. Rptr. 99, 814 P.2d 1341; Policemen's Benevolent Assoc. of New Jersey v. Township of Washington (3d Cir.1988) 850 F.2d 133, 141 [police officers exercise "the most awesome and dangerous power that a democratic state possesses with respect to its residentsthe power to use lawful force to arrest and detain them"].) 878 As observed above, the concepts of consent and force or fear with regard to kidnapping are inextricably intertwined. (See Michele D., supra, 29 Cal.4th at p. 609, 128 Cal. Rptr. 2d 92, 59 P.3d 164.) Thus, in those cases in which the movement was found to be by fraud alone, and not force or fear, the circumstances suggest the victim exercised free will in accompanying the perpetrator. By contrast, the threat of arrest carries with it the threat that one's compliance, if not otherwise forthcoming, will be physically forced. Thus, the use of force is implicit when arrest is threatened. Contrary to defendant's assertion, "being arrested" is not an "esoteric" fear that stretches the meaning of the statute. This is true regardless of whether the defendant used deception regarding the fact of the threatened arrest. The compulsion, which is the gravamen of the kidnapping crime, remains present. We therefore conclude an implicit threat of arrest satisfies the force or fear element of section 207(a) kidnapping if the defendant's conduct or statements cause the victim to believe that unless the victim accompanies the defendant the victim will be forced to do so, and the victim's belief is objectively reasonable. We further conclude there was substantial evidence here of force or fear, i.e., that Alesandria entered defendant's van under such implicit threat of arrest. In making this determination, we do not resolve evidentiary conflicts, but "`view the evidence in a light most favorable to'" the People, "`and presume in support of the judgment the existence of every fact the trier could reasonably deduce from the evidence.'" (People v. Johnson (1980) 26 Cal. 3d 557, 576, 162 Cal. Rptr. 431, 606 P.2d 738; People v. Felix (2001) 92 Cal. App. 4th 905, 910, 112 Cal. Rptr. 2d 311.) First, there was substantial evidence Alesandria subjectively feared arrest. Alesandria testified she was afraid she would be arrested if she did not get into the van. She believed defendant had the authority to arrest her because he displayed a badge and identified himself as a security officer. Alesandria had never dealt with the police before, and was afraid to not get into the van. "I requested to see his badge because I didn't believe him. But at the same time I didn't want to not believe him if he was telling the truth. I didn't want to make a situation worse than it had already been." Moreover, Alesandria's belief that she would be arrested if she did not accompany defendant back to the mall was objectively reasonable. Defendant approached the victim, who had been riding her bike, and stopped her by holding up a badge. He identified himself as a security guard, and indicated he stopped her for a law enforcement purpose. Specifically, he told the victim he had received a call about a suspected theft from a store Alesandria had just visited twice, and that the suspected thief was someone on a bicycle. Defendant told Alesandria she "would have to go with him." He then exerted control over the victim's belongings, at first trying to put her bike into his van. When he saw that the bike would not fit, he told her to lock it up, thus depriving her of transportation. He then took her backpack and put it in the van. Once the victim was in the van, defendant continued the ruse in a manner that reinforced the notion that he had law enforcement authority and that the victim might be in criminal trouble: He made a phone call to tell his partner or some other interested person that "the suspect was apprehended" and refused the victim's request to call her parents, telling her she had to wait until they returned to the mall to do so. As the Attorney General notes, when defendant "implicitly threatened Alesandria 879 with arrest if she did not get in the van and return with him to the mall to face the theft allegations, he necessarily threatened her with the possibility of force if she did not comply." This kind of compulsion is qualitatively different than if defendant had offered to give Alesandria a ride, or sought her assistance in locating a lost puppy, or any other circumstance suggesting voluntariness on the part of the victim. While defendant contends this is no more than a classic case of asportation by fraud, we disagree. As the Attorney General observes, defendant's "misidentification of himself and his implicit threats of false arrest were simply the vehicle for his conveyance of threats of force and fear that compelled Alesandria to get in his van." Thus, the evidence was sufficient to demonstrate a threat of force, and alternatively, that such a threat instilled fear in Alesandria that such force would actually be applied. Under either the force or the fear prong of the kidnapping statute, therefore, we conclude the evidence was sufficient. Defendant asserts that Alesandria was not "afraid of some implicit threat of forcible arrest," but rather "got into the van to prove her innocence," and was "simply afraid of the possibility of going to jail." It is not obvious how these concepts of fear of "implicit threat of forcible arrest" and fear of "the possibility of going to jail" substantially differ. In any event, contrary to defendant's assertions, we read the record as containing sufficient evidence from which a jury could reasonably conclude that Alesandria's movement was compelled by an implicit threat of arrest. Defendant also asserts that the Attorney General has waived the argument that the asportation was accomplished by the threat of force because the prosecutor did not make this argument below. Rather, he contends the "prosecution's case-in-chief was built entirely on arguing the show of authority vitiated consent and instilled fear in Alesandria M. that compelled her to move." As noted earlier, there is little meaningful distinction and considerable overlap between the concepts of threat of force and instilled fear. Moreover, whether characterized as any other means of instilling fear or threat of force by the prosecution below, the prosecutor argued at length that the only reason Alesandria got into the van was because of defendant's show of authority and her fear she would be arrested, and hence her movement was not voluntary. Such argument focused the jury's attention on the evidence demonstrating both a threat of force and a threat that instilled fear in Alesandria. The jury was instructed that the victim's movement must be compelled by either force or fear, and was free to rely on either prong in reaching its verdict. The Attorney General also asserts that the Legislature's 1990 addition of the language "any other means of instilling fear" "increase[s] the scope of liability for kidnapping to those who use fear of any type in order to compel the movement of their victims." He asserts this would include, for example, threatening to report a coworker to a supervisor for sexual harassment unless the coworker accompanies the defendant. He further asserts, "[a] kidnapper could threaten the property, reputation, or livelihood of the victim in order to compel the victim to comply with the kidnapper's demands." Here, it is apparent that defendant's actions creating a threat of force would have constituted kidnapping even prior to the 1990 amendment to section 207(a), and that such a threat would also "instill[ ] fear" of the potential use of such force in the victim under the current wording of the statute. Because we conclude there was sufficient evidence Alesandria's movement 880 was accomplished by threatened force and fear of that threatened force, we need not decide in this case what other forms of fear would also satisfy the amended statute. We note, however, in response to the Attorney General's suggested broad definition, that section 207(a) refers to "any other means of instilling fear," not to "any fear." Moreover, our review of the legislative history of the 1990 amendment does not conclusively demonstrate that any fear would now satisfy section 207(a). For example, that history notes, "Although most kidnappings may be accomplished by the use of force, there are instances where the kidnapper may accomplish the same by instilling fear in the victim. For example, the kidnapper may threaten to kill a family member. Thus, by expanding the definition of the crime to include such situations, the bill would close a potential loophole in the law." (Assem. Com. on Pub. Safety, analysis of Sen. Bill No. 1564 (1989-1990 Reg. Sess.) as amended Jan. 16, 1990, p. 3.) This example of violence towards one close to the victim, rather than the victim herself, is categorically different from fear the perpetrator will not attend a high school prom with the victim, or other fears substantially removed from the use of force. Indeed, when we observed in Hill, supra, 23 Cal. 4th 853, 98 Cal. Rptr. 2d 254, 3 P.3d 898, that our cases prior to the 1990 amendment had held "that a taking is forcible if accomplished through fear," we were referring to fear of "harm or injury from the accused." (Id. at p. 856, fn. 2, 98 Cal. Rptr. 2d 254, 3 P.3d 898, citing People v. Alcala (1984) 36 Cal. 3d 604, 622, 205 Cal. Rptr. 775, 685 P.2d 1126, superseded by statute on other grounds; Stephenson, supra, 10 Cal.3d at pp. 659-660, 111 Cal. Rptr. 556, 517 P.2d 820.) Thus, while we need not delineate in this case the precise parameters of the language "any other means of instilling fear," it is unlikely that by adding this language the Legislature intended to expand the crime of kidnapping to include movement compelled by fear of any and all negative consequences to the victim. DISPOSITION The judgment of the Court of Appeal is reversed, and the case remanded to that court for proceedings consistent with this opinion. WE CONCUR: GEORGE, C.J., KENNARD, BAXTER, WERDEGAR, CHIN and MORENO, JJ. NOTES [1] All further statutory references are to the Penal Code. [2] Defendant was also charged with crimes unrelated to this victim or the issue before us. Hence, we do not discuss them further. [3] Section 207 provides in relevant part: "(a) Every person who forcibly, or by any other means of instilling fear, steals or takes, or holds, detains, or arrests any person in this state, and carries the person into another country, state, or county, or into another part of the same county, is guilty of kidnapping. [¶] . . . [¶] (f) Subdivisions (a) to (d), inclusive, do not apply to any of the following: [¶] . . . [¶] (2) To any person acting under Section 834 or 837." [4] Section 834 provides: "An arrest is taking a person into custody, in a case and in the manner authorized by law. An arrest may be made by a peace officer or by a private person." [5] Section 837 provides: "A private person may arrest another: [¶] 1. For a public offense committed or attempted in his presence.[¶] 2. When the person arrested has committed a felony, although not in his presence. [¶] 3. When a felony has been in fact committed, and he has reasonable cause for believing the person arrested to have committed it." [6] In 1891, section 207 provided in relevant part: "Every person who forcibly steals, takes, or arrests any person in this State, and carries him into another . . . county, . . . is guilty of kidnaping." (1872 Pen.Code, § 207.)	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1825047/	347 B.R. 19 (2006) Susan B. HERSH, Plaintiff, v. UNITED STATES of America, et al., Defendants. No. CIV.A. 3:05-CV-2330-N. United States District Court, N.D. Texas, Dallas Division. July 26, 2006. 20 21 Howard Marc Spector, Law Office of Howard Marc Spector, Dallas, TX, for Plaintiff. Marcia K. Sowles, Department of Justice, Washington, DC, for Defendants. MEMORANDUM OPINION AND ORDER GODBEY, District Judge. Before the Court is Defendants' Motion to Dismiss. The Court holds that section 526(a)(4)'s restrictions on legal advice violate Hersh's First Amendment rights, but otherwise grants the motion to dismiss. I. ORIGINS OF HERSH'S CLAIMS AND THE GOVERNMENT'S MOTION TO DISMISS In 2005, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA"). The act contains provisions arguably applicable to consumer bankruptcy attorneys and the manner in which they provide services to both potential and actual clients. Defendant Alberto Gonzales, Attorney General of the United States, and Defendant Greg Abbot, Attorney General of Texas, are the heads of the agencies charged with enforcing these provisions. (Hereafter, the Defendants, i.e., the Attorneys General and their respective governments, will be collectively referred to as the "Government.") Plaintiff Susan B. Hersh is a Dallas, Texas attorney whose practice includes counseling clients for a fee regarding federal bankruptcy law. She brings this cause of action both seeking declaratory judgement that the BAPCPA does not apply to attorneys and as a facial challenge to the constitutionality several provisions. The provisions at issue are: 11 U.S.C. 526(a)(4), which prohibits attorneys from giving certain advice to their clients;[1] and 11 U.S.C. § 527, which requires specific 22 disclosures by providers of bankruptcy assistance.[2] The Government subsequently filed this motion seeking to dismiss all Hersh's claims. II. STANDARD FOR MOTION TO DISMISS Where a party fails to state a claim upon which relief can be granted, dismissal pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is appropriate. See FED. R. Civ. P. 12(b)(6). When ruling on a Rule 12(b)(6) motion, courts must accept all well pleaded facts as true and view them in the light most favorable to the nonmovant. See Calhoun v. Hargrove, 312 F.3d 730, 733 (5th Cir.2002); Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir.1995).[3] III. THE TERM "DEBT RELIEF AGENCY" INCLUDES ATTORNEYS Hersh's first claim seeks declaratory judgement that she, a licensed attorney advising clients on bankruptcy, is not a "debt relief agency" as defined in 11 U.S.C. § 101. Paragraph 12A of section 101 defines debt relief agency as "any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer under section 110. . . ." 11 U.S.C. § 101(12A). The paragraph then continues to list five exceptions to the general definition. Id. at (A-E). Section 101 also defines "bankruptcy assistance" as any goods or services sold or otherwise provided to an assisted person with the express or implied purpose of providing information, advice, counsel, document preparation, or filing, or attendance at a creditors' meeting or appearing in a case or proceeding on behalf of another or providing legal representation with respect to a case or proceeding under this title. 11 U.S.C. § 101(4A).[4] A reading of the text for plain meaning indicates that the term "debt relief agency" includes bankruptcy attorneys such as Hersh. Plain meaning is the preferred method for interpreting statutory language. See Lamie v. U.S. Trustee, 540 U.S. 526, 534, 124 S. Ct. 1023, 157 L. Ed. 2d 1024 (2004); Sutton v. United States, 819 F.2d 1289, 1292-1293 (5th Cir.1987). Here, as only attorneys are authorized to 23 provide legal advice and "providing legal advice" is part of the definition of bankruptcy assistance, it seems clear that bankruptcy attorneys such as Hersh fit within the definition of "persons providing bankruptcy assistance." Attorneys also provide most of the other functions defined as "bankruptcy assistance." Hersh argues that attorneys should be excluded from the' above reading due to seeming inconsistencies their inclusion would cause in other parts of the statute.[5] Any inferences possibly created by imprecise drafting are surely overwhelmed by the plain language. Moreover, after the above stated definition for "debt relief agency," the paragraph continues to list five exceptions; if Congress had wanted attorneys excluded from the term "debt relief agency" (and, as a result, the requirements of BAPCPA at issue here) it surely would have taken this opportunity to exclude them from what otherwise they are so plainly within.[6] Further, legislative history clearly indicates that Congress had attorneys in mind with this statute; the House Report on the BAPCPA mentions "attorney" 164 times. H.R. REP. 109-31, reprinted in 2005 U.S.C.C.A.N. 88.[7] Accordingly, the Court grants the Government's motion to dismiss with respect to Hersh's claim for declaratory judgement that she is not a debt relief agency. IV. 11 U.S.C. § 526(A)(4) UNCONSTTUTIONALLY RESTRICTS HERSH'S SPEECH A. Standards to Apply in Determining Constitutionality of Restrictions on Speech The most significant portions of the parties' briefing concerns 11 U.S.C. § 526(a)(4). This section provides: (a) A debt relief agency shall not . . . (4) advise an assisted person or prospective assisted person to incur more debt in contemplation of such person filing a case under this title or to pay an attorney or bankruptcy petition preparer fee or charge for services performed as part of preparing for or representing a debtor in a case under this title. 11 U.S.C. § 526(a)(4). The parties dispute two issues with respect to section 526(a)(4): whether the Court ought to apply strict scrutiny or a more lenient standard to determine the section's constitutionality, and whether the section meets whichever standard is applied. Because the Court finds that section 526(a)(4) does not survive scrutiny under the more lenient standard, it need not decide the first question. The arguments of the parties lay out two alternative tests for use to determine 24 the constitutionality of section 526(a)(4). Traditionally, courts subject content-based restrictions on speech to strict scrutiny. Strict scrutiny requires the regulation of speech to be (1) narrowly tailored to promote (2) a compelling government interest. See United States v. Playboy Entm't Group, Inc., 529 U.S. 803, 813, 120 S. Ct. 1878, 146 L. Ed. 2d 865 (2000). Here, the Government proposes that section 526(a)(4) is an ethical regulation, and thus subject to a lesser standard outlined in Gentile v. State Bar of Nev., 501 U.S. 1030, 111 S. Ct. 2720, 115 L. Ed. 2d 888 (1991).[8] In Gentile, the Court faced the question of whether a test used by the Nevada Supreme Court in regulating attorney statements to the press violated the First Amendment. It found that the state's test achieved a "constitutionally permissible balance" because it (1) served "the State's legitimate interest in regulating the activity in question" and (2) "impose[d] only narrow and necessary limitations on lawyers' speech." Id. at 1075, 111 S. Ct. 2720. The balancing test in Gentile and the strict scrutiny test appear to share the requirement that any restrictions on speech be narrow. B. Section 526(a)(4) is Not Sufficiently Narrow In enacting BAPCPA, Congress sought to remedy abuse of the bankruptcy system. With regards to section 526(a)(4), the Government alleges that Congress sought to end the manipulation of the system by certain filers who took on additional debt prior to bankruptcy. However, rather than changing the system to close the loopholes or penalize those who take on such debt, Congress in section 526(a)(4) enacted a prophylactic rule, banning the bankruptcy attorneys from advising their clients to take on additional debts "in contemplation" of bankruptcy. Thus, section 526(a)(4) prevents lawyers from advising clients to take actions that are lawful, even under BAPCPA. Moreover, taking on additional debt "in contemplation" of bankruptcy does not necessarily constitute abuse. While the Government argues that taking on additional debt may harm a debtor in some cases, it seems obvious that this also means that in some other cases, it may not. (Defendants' Reply 5-6). Without addressing all the complexities of bankruptcy law, it seems quite possible that sometimes taking on more debt could be the most financially prudent option for someone considering bankruptcy. That situation could be the case when: (1) refinancing at a lower rate to reduce payments and forestall or even prevent entering bankruptcy, or (2) taking on secured debt such as loan on an automobile that would survive bankruptcy and also enable the debtor to continue to get to work and make payments. Thus, section 526(a)(4) prevents lawyers from giving clients their best advice.[9] 25 Section 526(a)(4), therefore, is overinclusive in at least two respects: (1) it prevents lawyers from advising clients to take lawful actions; and (2) it extends beyond abuse to prevent advice to take prudent actions. Thus, section 526(a)(4) of the BAPCPA imposes limitations on speech beyond what is "narrow and necessary." Gentile, 501 U.S. at 1075, 111 S. Ct. 2720; see also In re R.M.J., 455 U.S. 191, 203, 102 S. Ct. 929, 71 L. Ed. 2d 64 (1982) (Even under intermediate scrutiny, "[s]tates may not place an absolute prohibition on certain types of potentially misleading information . . . if the information also may be presented in a way that is not deceptive."); Conant v. Walters, 309 F.3d 629, 638-39 (9th Cir.2002) (finding that government could not justify policy that threatened to punish a physician for recommending to a patient the medical use of marijuana on ground that such a recommendation might encourage illegal conduct by the patient). Accordingly, the Court finds 11 U.S.C. § 526(a)(4) facially unconstitutional and denies the Government's motion to dismiss Hersh's claim. V. 11 U.S.C. § 527 DOES NOT UNCONSTITUTIONALLY COMPEL SPEECH In 11 U.S.C. § 527, BAPCPA requires attorneys to provide "assisted persons" with written notice of specified information regarding bankruptcy. In particular section 527(b) states: A debt relief agency providing bankruptcy assistance to an assisted person shall provide each assisted person at the same time as the notices required under subsection (a)(1) the following statement, to the extent applicable, or one substantially similar. The statement shall be clear and conspicuous and shall be in a single document separate from other documents or notices provided to the assisted person:[10] 11 U.S.C. § 527(b). The required statement is set forth in the margin.[11] 26 The Supreme Court has previously addressed statutes that require a member of a profession to provide customers with factual information regarding provided services. See, e.g., Riley v. Nat'l Fed'n of the Blind of N.C., Inc., 487 U.S. 781, 108 S. Ct. 2667; 101 L. Ed. 2d 669 (1988) (licensed fundraisers); Planned Parenthood of Southeastern Penn. v. Casey, 505 U.S. 833, 112 S. Ct. 2791, 120 L. Ed. 2d 674 (1992) (doctors providing abortions). Clearly, section 527 implicates the professional's First Amendment rights not to speak. See Wooley v. Maynard, 430 U.S. 705, 97 S. Ct. 1428, 51 L. Ed. 2d 752 (1977) (First Amendment rights "include[] both the right to speak freely and the right to refrain from speaking at all."); Riley, 487 U.S. at 797-98, 108 S. Ct. 2667 ("[C]ases cannot be distinguished simply because they involved compelled statements of opinion while here we deal with compelled statements of `fact': either form of compulsion burdens protected speech.") Yet, as members of a licensed profession, attorneys and other professionals are subject to regulation of their professional activities by the state, which may extend to speech. See Riley, 487 U.S. at 799, 108 S. Ct. 2667; In re Sawyer, 360 U.S. 622, 646-47, 79 S. Ct. 1376, 3 L.Ed.2d 1473(1959) (Stewart, J., concurring); Innovative Database Sys. v. Morales, 990 F.2d 217, 221 (5th Cir. 1993). In Riley, the Supreme Court applied strict scrutiny to invalidate a North Carolina law requiring that "professional fundraisers disclose to potential donors, before an appeal for funds, the percentage of charitable contributions collected during the previous 12 months that were actually turned over to charity." Riley, 487 U.S. at 795-96, 108 S. Ct. 2667. The Court found that "the compelled disclosure will almost certainly hamper the legitimate efforts of professional fundraisers to raise money for the charities they represent," that the "provision necessarily discriminates against small or unpopular charities," and that "more benign and narrowly tailored options are available." Id. at 799-800, 108 S. Ct. 2667. The Court concluded that the means chosen to achieve the state's interest in full disclosure were "unduly burdensome and not narrowly tailored." Id. at 798, 108 S. Ct. 2667; see also Tex. State Troopers Ass'n, Inc. v. Morales, 10 F. Supp. 2d 628, 633-34 (N.D.Tex.1998) (relying on Riley to find "the Court must hold unconstitutional a mandatory disclosure provision directed towards solicitation where more benign and narrowly tailored options are available.") 27 In Casey, a more closely analogous circumstance, a plurality of the Court upheld a Pennsylvania provision requiring doctors to provide a woman seeking an abortion with "truthful, nonmisleading information" about the procedure, health risks, conditions surrounding her pregnancy, and the availability of state provided information. Casey, 505 U.S. at 881-82, 112 S. Ct. 2791. In upholding the provision, the Court recognized a substantial government interest in providing a women with the risks of the procedure and a legitimate interest in ensuring a "mature and informed" decision. Id. at 882-83, 112 S. Ct. 2791. Further, requiring the doctors to provide information presented no "substantial obstacle" and was not an "undue burden." Id. at 883, 112 S. Ct. 2791. In the case at hand, section 527 advances a sufficiently compelling government interest and does not unduly burden either the attorney-client relationship or the ability of a client to seek bankruptcy. The government clearly has a legitimate interest in attempting to ensure that a client is informed of certain basic information before he or she commences a case in bankruptcy. The amount of debt discharged by bankruptcy in a given year can be tens of billions of dollars, H.R. REP. 109-31, reprinted in 2005 U.S.C.C.A.N. 88, 91, and as among consumer creditors, attorneys, and their debtor clients, the consumer debtor is often at an informational disadvantage. Thus, the government interest is significant. Given that significant interest, the compelled speech of section 527 is a reasonable burden. Hersh argues that many of the paragraphs within the required statement provide false or misleading information.[12] But in an area of law as intricate as bankruptcy, a generalized statement may often require further explanation by a client's attorney.[13] Nothing in section 527 prevents this. Further, the section itself provides that the statement may be altered, so long as the content is "substantially similar," and that the statements need only be provided "to the extent applicable." 11 U.S.C. § 527(b). This leaves the bankruptcy attorney with sufficient control of the distribution of the messages of the statement to avoid any undue burden. See Fargo Women's Health Org. v. Schafer, 18 F.3d 526, 532-34 (8th Cir.1994) (upholding provision requiring doctors to provide information and where physicians may comment on or dissociate themselves from the materials.) Finally, unlike in Riley, the provision neither acts as a barrier inhibiting the ability of a potential client to seek relief nor disproportionately impacts the ability of certain attorneys to serve their clients. The factual, viewpoint-neutral statement provides a sufficiently benign and narrow means of ensuring that clients are aware of certain general information regarding bankruptcy. Accordingly, the Court grants the Government's motion to dismiss Hersh's claim that 11 U.S.C. § 527 violates the First Amendment. *28 VI. HERSH DOES NOT HAVE STANDING TO ASSERT FIFTH AMENDMENT CLAIMS In addition the First Amendment issues raised above, Hersh also alleges in her complaint that the discussed provisions are unconstitutional on Fifth Amendment grounds, namely the right to retain counsel in civil matters. See Potashnick v. Port City Constr. Co., 609 F2d 1101, 1118 (5th Cir.1980). The Government moves to dismiss these claims for lack of standing, arguing that Hersh may not assert the right to counsel on behalf of her prospective clients. See Kowalski v. Tesmer, 543 U.S. 125, 129, 125 S. Ct. 564, 160 L.Ed2d 519 (2004). Standing is an element of subject matter jurisdiction and, accordingly, should be addressed prior to any determination of the claim's constitutionality. See Sample v. Morrison, 406 F.3d 310, 312 (5th Cir.2005); Ramming v. United States, 281 F.3d 158, 161 (5th Cir.2001) ("When a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.") "The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting jurisdiction." Id. In her response, Hersh concedes that she does not have standing to assert the right to counsel on behalf of her clients. (Plaintiffs Resp. n. 6). Instead, she asserts, without legal authority, (1) that the right to counsel includes a right to "unvarnished" legal advice, and (2) that the protection of this new right must mean that Hersh, as a bankruptcy lawyer, has the right to provide counsel. The Court declines to twice extend a recognized right on its own initiative as required in order to provide Hersh with standing for her Fifth Amendment claims. Accordingly, the Court grants the Government's motion to dismiss with respect to all Hersh's claims based on the Fifth Amendment right to counsel. VII. CONCLUSION The Court dismisses with prejudice Hersh's claims regarding "debt relief agency," sections 527 and 528, and the Fifth Amendment. The Court denies the Government's motion to dismiss Hersh's section 526(a)(4) First Amendment claim. The Court invites Hersh to move for summary judgement on that claim once she amends her complaint to assert it explicitly. NOTES [1] Plaintiff's Amended Complaint makes no express mention of 11 U.S.C. § 526; however. both sides argue the constitutionality of section 526 at great length, apparently believing it to be within the scope of Hersh's claims. Consistent with the parties' treatment, the Court will address section 526. The Court grants Hersh leave to amend her complaint to include an express claim for relief that 11 U.S.C. § 526(a)(4) violates the First Amendment. [2] In her complaint, Hersh also alleges that 11 U.S.C. § 528 is unconstitutional on grounds similar to those alleged for section 527. However, in her response, Hersh makes no effort to refute the Government's argument that her section 528 claims present no basis for relief. Accordingly, the Court grants the Government's motion with respect to all of Hersh's claims pertaining to 11 U.S.C. § 528. [3] In a footnote, the Government raises the issue of whether Hersh has standing to bring these claims, as no entity has taken action to enforce BAPCPA against Hersh. Given the First Amendment concerns alleged here, such an action is unnecessary. Specifically, Hersh alleges that her speech is simultaneously stifled and compelled by the provisions at issue; the alleged suppression of Hersh's speech since the enactment of the BAPCPA is itself enough to provide standing. See Center for Individual Freedom v. Carmouche, 449 F.3d 655, 659-660 (5th Cir.2006) (finding nonprofit group had standing to challenge law that had potential chilling effect on speech, citing Virginia v. Am. Booksellers Ass'n, 484 U.S. 383, 392, 108 S. Ct. 636, 98 L. Ed. 2d 782 (1988)). [4] Section 101 also defines "assisted person" as "any person whose debts consist primarily of consumer debts and the value of whose nonexempt property is less than $150,000." 11 U.S.C. § 101(4A). Accordingly, this Court's holding that the term "debt relief agency" applies to Hersh does not necessarily mean it applies to all attorneys. [5] First, she points out that the definition of debt. relief agency, while broad enough to include both attorneys and bankruptcy petition preparers, only specifically mentions bankruptcy petition preparers. Also, Hersh argues that it would be counterintuitive to require an attorney as a debt relief agency to provide a statement under 11 U.S.C. § 527(h) telling his or her clients they have a right to an attorney and that only attorneys can provide legal advice. [6] For a more detailed discussion of the meaning of "debt relief agency" within BAPCPA, see Robert Warm, Jr., "Debt Relief Agencies." Does the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Violate Attorneys' First Amendment Rights?, 14 AM. BANKR. INST. L. REV. 273, 274-283 (2006). [7] As part of the factors motivating passage of BAPCPA, the House Report also cites "[a] civil enforcement initiative undertaken in 2002 . . . [that] has `consistently identified' such problems as `debtor misconduct and abuse, misconduct by attorneys and other professionals, problems associated with bankruptcy petition preparers, and instances where a debtor's discharge should be challenged.'" 2005 U.S.C.C.A.N at 92 (emphasis added). [8] Neither 11 U.S.C. § 526(a)(4) nor any other part of the section purports to be an ethical standard. The section is titled "Restrictions on debt relief agencies" and definitively outlines required and prohibited actions. Compare with Gentile, 501 U.S. at 1065-76, 111 S. Ct. 2720 (finding constitutional the standard enunciated by Nevada Supreme Court to distinguish permissible and impermissible communication with the press) and Canatella v. Stovitz, 365 F. Supp. 2d 1064 (N.D.Cal.2005) (utilizing Gentile test in holding state bar statutes and professional rules not unconstitutional). Accordingly, the Court alternatively holds that strict scrutiny applies to 11 U.S.C. § 526(a)(4) and that the provision fails under strict scrutiny for the same reasons it fails the more lenient test, as explained below. [9] Section 526(a)(4) may also work to deprive courts, as well as clients, of good counsel. The interactions of constantly shifting bankruptcy provisions may cause situations to arise in which a legal yet otherwise counterintuitive behavior is in the client's best financial interest. Section 526(a)(4) prevents attorneys from presenting those options to their clients and ultimately to the courts. "By seeking to prohibit the analysis of certain legal issues and to truncate presentation to the courts, the enactment under review prohibits speech and expression upon which the courts must depend for the proper exercise of judicial power." Legal Services Corp. v. Velazquez, 531 U.S. 533, 545, 121 S. Ct. 1043, 149 L. Ed. 2d 63 (2001). More succinctly put, lain informed, independent judiciary presumes an informed, independent bar." Id. [10] The notices in subsection (a)(1) must be provided "before commencement of a case" per 11 U.S.C. § 342(b)(1). See 11 U.S.C. § 527(a). [11] The required statement is set forth as follows: "IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER. "If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPEIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone. "The following information helps you understand what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine. "Before filing a bankruptcy case, either you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and which form of relief is most likely to be beneficial for you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents called a Petition, Schedules and Statement of Financial Affairs, as well as in some cases a Statement of Intention need to be prepared correctly and filled with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court. Once your case starts, you will have to attend the required first meeting of creditors where you may be questioned by a court official called a `trustee' and by creditors. "If you choose to file a chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. A creditor is not permitted to coerce you into reaffirming your debts. "If you choose to file a chapter 13 case in which you repay your creditors what you can afford over 3 to 5 years, you may also want help with preparing your chapter 13 plan and with the confirmation hearing on your plan which will be before a bankruptcy judge. "If you select another type of relief under the Bankruptcy Code other than chapter 7 or chapter 13, you will want to find out what should be done from someone familiar with that type of relief. "Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition preparers, can give you legal advice." 11 U.S.C. § 527(b). [12] For example, Hersh argues that it is misleading to provide a client with a statement informing the client that he or she "will have to pay a filing fee to the bankruptcy court," as required by section 527(b), without mentioning that Federal Rule of Bankruptcy Procedure 1006(b) may permit such fees to be deferred. [13] Hersh alleges concerns about possible negative implications created by omitted details. These concerns are not enough to invalidate section 527. See, e.g., Fargo Women's Health Org. v. Schafer, 18 F.3d 526, 533-34 (8th Cir.1994) (When requiring doctors to provide information, "Ulf in certain cases such a statement would be misleading or false, it would undoubtedly be because of unique and personal background facts that would be at least suspected if not known to the woman.") The simple cure to incomplete information is advice of counsel.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1840463/	971 So. 2d 593 (2008) Charles E. PATE v. CONSECO LIFE INSURANCE COMPANY and Jack Creely. No. 2006-CA-01496-SCT. Supreme Court of Mississippi. January 3, 2008. Grady L. McCool, III, Joseph E. Roberts, Jr., Jackson, attorneys for appellant. Jacob Michael Jenkins, Charles E. Griffin, Jackson, attorneys for appellees. Before SMITH, C.J., GRAVES AND RANDOLPH, JJ. GRAVES, Justice, for the Court. ¶ 1. This is an appeal from an order granting summary judgment in the Circuit Court of Itawamba County. Because we find that the trial court erred in finding no genuine issue of material fact and in finding that Conseco is entitled to a judgment as a matter of law, we reverse and remand. FACTS ¶ 2. Charles Pate obtained a life insurance policy from Lamar Life Insurance Company on November 19, 1984. Bill Ogden was the company representative from Lamar, and Jack Creely was the agent involved in the transaction. Lamar Life later merged with Conseco Life Insurance Company in 1999. Hereinafter, all of the defendants will be referred to as "Conseco" for purposes of clarity. Pate had a planned monthly premium of $186.22 for the $50,000 policy. On or about August 21, 2001, Pate received a letter informing him that he would have to pay an increased premium of $743.56 or his policy would lapse.[1] Thereafter, Pate filed an action for breach of contract on November 17, 2003, in the Circuit Court of Itawamba County. Conseco filed a Motion for Summary Judgment on February 15, 2006. The trial court granted the motion for summary judgment by order filed August 8, 2006. Subsequently, Pate filed this appeal. ANALYSIS ¶ 3. Pate asserts that the trial court erred in granting Conseco's motion for summary judgment. This Court employs a de novo standard of review in considering 595 a trial court's decision on a motion for summary judgment. See Huff-Cook, Inc. v. Dale, 913 So. 2d 988 (Miss.2005). See also Hartford Cas. Ins. Co. v. Halliburton Co., 826 So. 2d 1206 (Miss.2001). "A motion for summary judgment should be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Id. at 1209. See Rule 56(c), Mississippi Rules of Civil Procedure (M.R.C.P.). "To prevent summary judgment, the non-moving party must establish a genuine issue of material fact by means allowable under the rule." Hartford, 826 So.2d at 1209. Ambiguity ¶ 4. Pate asserts that the terms of the contract are clear regarding the amount and payment of the premium. However, Conseco relies on language in the cash-value clause in support of its decision to raise the premium. If one accepts Conseco's argument, then the cash-value clause creates an ambiguity when read with the other clauses. Nevertheless, any ambiguous terms would have to be construed against Conseco. This Court has said that "where a contract is clear and unambiguous, its meaning and effect are matters of law." U.S. Fidelity & Guar. Co. v. Omnibank, 812 So. 2d 196, 198 (Miss. 2002). This Court has further said: It is also bedrock law "that ambiguous terms in an insurance contract are to be construed most strongly against the preparer, the insurance company." Omnibank, 812 So.2d at 198; Caldwell v. Hartford Acc. & Indem. Co., 248 Miss. 767, 776, 160 So. 2d 209, 212-13 (1964) ("The rule that the insurance policy prepared by the insurer must be construed more strongly against the insurance company, and that any fair doubt should be resolved in favor of the insured, is so well-settled in the law of insurance that we hesitate to cite any cases"). We must refrain from altering or changing a policy where the terms are unambiguous, even if there is a resulting hardship on the insured party. Titan Indem. Co. v. Estes, 825 So. 2d 651, 656 (Miss.2002); State Farm Mut. Auto. Ins. Co. v. Scitzs, 394 So. 2d 1371, 1373 (Miss.1981). Like any other contract, if an insurance contract is plain and unambiguous, it should be construed as written. Estes, 825 So.2d at 656; Scitzs, 394 So.2d at 1372; see generally Jeffrey Jackson, Mississippi Insurance Law & Practice § 1:7 (2001). Farmland Mut. Ins. Co. v. Scruggs, 886 So. 2d 714, 717 (Miss.2004). ¶ 5. The record indicates that Pate's contract provided for a planned monthly premium of $186.22. Further, the contract provided the following: 1. PREMIUMS are amounts of money you pay us to keep this policy in force. Your premium payments are flexible. This means that you can choose the timing and amount of your Premium payments, subject to the restrictions in this section. 2. Your choice regarding timing and amounts of Premiums will affect the Cash Values of the policy. In the event you stop paying Premiums, the timing and amount of Premiums you have already paid will affect the length of time the policy will stay in force and, in certain cases, the amount of the death benefit. The mechanics governing this and an explanation of the Cash Value are found in the section entitled "V CASH VALUE AND THE CASH VALUE BENEFITS." . . . 4. PLANNED PREMIUMS are those you intend to make at regular intervals. Planned Premiums may be paid as long as this policy is in force before the Insured's death. You chose an amount 596 and frequency for your Planned Premiums. Your choice is shown on the Schedule Page. 5. You may request us to change the amount and frequency of your Planned Premiums. We have limits on the size of change in Planned Premiums which we will approve. If you want to change the Planned Premiums, send a written request to us at our home office. Tell us your name, the policy number, the new amount for the Planned Premiums, and the frequency with which you plan to make these Premium payments. Your request must be signed. . . . 7. UNSCHEDULED PREMIUMS are premiums you pay us after issue which are not Planned Premiums. We have limits on the maximum frequency and maximum amount of Unscheduled Premiums which we will accept. Within these limits, you may pay Unscheduled Premiums at any time this policy is in force before the Insured's death. ¶ 6. Conseco points to language contained in the section entitled "What happens if the Cash Value becomes very small," which says: If the policy's Cash Value, minus the value of any Policy Loan Balance less unearned loan interest, on any Monthly Anniversary, is not enough to cover the Month's Deduction for the next Policy Month, the policy will enter its GRACE PERIOD. The Grace Period is the next two (2) Policy Months after this Monthly Anniversary. If you do not pay enough Premium during the Grace Period to cover any amounts in arrears, then this policy will automatically terminate at the end of the Grace Period. It will then have no cash value. Conseco fails to point to any language contained in the policy which would allow for an increase in the planned monthly premium. Therefore, we find that the terms of the contract plainly and unambiguously support Pate and should be construed as written. Statute of Limitations ¶ 7. Pate asserts that the trial court erred in holding that the statute of limitations barred all of Pate's claims against Conseco. Specifically, Pate argues that he was expressly told, as an inducement to purchase the policy, that his monthly premium would be $186.22 and would never increase. Therefore, Pate asserts, a claim resulting from an increase in premiums would not ripen until he was put on notice of the increase. ¶ 8. Mississippi Code Annotated Section 15-1-49 provides for a three-year statute of limitations after the cause of action accrues. The trial court found that Pate's action was barred by the statute of limitations pursuant to Stephens v. Equitable Life Assur. Soc'y of the United States, 850 So. 2d 78 (Miss.2003). Pate asserts that the trial court misapplied Stephens. We agree. ¶ 9. Stephens involved an action for fraudulent concealment and misrepresentation. The cause of action accrued in 1972, but the plaintiffs did not file suit until 2001. This Court said that, in such a case, "plaintiffs have a two-fold obligation to demonstrate that (1) some affirmative act or conduct was done and prevented discovery of a claim, and (2) due diligence was preformed on their part to discover it." Id. at 84. This Court found: "The policies were unambiguous and clearly stated the terms of payment. There was no affirmative act to prevent discovery, the terms were written into the policy." Id. ¶ 10. In the instant case, the policy does not unambiguously and/or clearly state any terms for an increase in the monthly planned premium and, as a result, *597 Stephens is clearly distinguishable. Furthermore, Pate's cause of action accrued when his premium was increased in 2001. Pate filed his action in 2003, which was within the three-year statute of limitations provided by Mississippi Code Annotated Section 15-1-49. Therefore, the trial court erred in finding no genuine issue of material fact and in finding that Conseco is entitled to a judgment as a matter of law. Accordingly, we reverse the order granting summary judgment and remand this matter to the trial court for proceedings consistent with this opinion. ¶ 11. REVERSED AND REMANDED. SMITH, C.J., WALLER AND DIAZ, P.JJ., EASLEY, CARLSON, DICKINSON, RANDOLPH AND LAMAR, JJ., concur. NOTES [1] The annual report for November 19, 2000, through November 18, 2001, shows that the planned premium increased to $340 per month.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1595998/	581 F.Supp. 160 (1983) W.L. BALLARD, Plaintiff, v. Paul BLOUNT, et al., Defendants. Civ. A. No. C 81-2238A. United States District Court, N.D. Georgia, Atlanta Division. December 12, 1983. 161 J. Hue Henry, Athens, Ga., for plaintiff. Michael Bowers, Atty. Gen., Alfred L. Evans, Asst. Atty. Gen., H. Perry Michael, Carol Atha Cosgrove, Sr. Asst. Attys. Gen., Atlanta, Ga., for defendants. ORDER VINING, District Judge. In this 42 U.S.C. § 1983 action, the plaintiff, a tenured professor at Georgia State University, alleges that he was retaliated against for conduct protected by the First and Fourteenth Amendments. In addition, he alleges that he was not awarded salary increases to which he was entitled and that this action violated the due process and equal protection clauses of the Fourteenth Amendment. The defendants have moved for summary judgment, claiming that the plaintiff's alleged speech was not protected because it did not relate to matters of "public concern" and that their pay raise system did not violate the plaintiff's due process and equal protection rights. I. BACKGROUND The plaintiff, Dr. William Lewis Ballard, was hired as an assistant professor of English at Georgia State University in 1969, and shortly thereafter he began developing a linguistics program in the English department. In 1973 he was promoted to associate professor of English and was awarded tenure. He continued teaching only linguistics courses until 1979. From the inception of the linguistics program in 1969 until its ultimate dissolution in 1980, it is uncontroverted that the linguistics program was plagued by consistently low student interest. The defendants contend that the lack of student interest was the motivating factor in the decision to dissolve the program. Shortly before the dissolution of the linguistics program, but at the time when enrollment in the linguistics courses was extremely low, defendant Dr. Blount, Chairman of the English department and Dr. Ballard's immediate supervisor, informed Dr. Ballard that he (Dr. Ballard) would have to teach traditional English courses rather than the linguistics courses which he had previously taught. Dr. Ballard chose teaching a freshman-level English class, and he began teaching this class in the fall of 1979. He continued teaching in the English department until September 1981, at which time he was transferred to the College of Public and Urban Affairs. Shortly thereafter, in December 1981, Dr. Ballard instituted this suit. In his complaint Dr. Ballard alleges that he has received less than the average annual salary increases for the academic years 1976-77 through 1981-82. He claims that these less-than-average salary increases were retaliatory actions designed to punish him for the exercise of rights secured by the First and Fourteenth Amendments. Dr. Ballard also claims that the defendants retaliated against him in a variety of other ways, including: cancelling the entire linguistics program, failing to appoint him to faculty committees, denying him equal release time (pay without duties), and failing to assign him to appropriate summer teaching duties.[1] 162 After reviewing Dr. Ballard's complaint and deposition, this court has identified four separate communicative and associative activities for which Dr. Ballard claims he was retaliated against. These claims may be summarized as follows: (1) A letter he wrote objecting to the joint decision of Dr. Blount and the Department Tenure Committee which recommended denying tenure to a colleague of Dr. Ballard. Ballard Deposition at 27. (2) Dr. Ballard's challenges to the manner in which he and other colleagues were assigned to teach freshman-level English courses. Ballard Deposition at 19. (3) Dr. Ballard's claim that he was further retaliated against when he unsuccessfully challenged through an internal administrative grievance procedure the defendants' decision to award him less-than-average annual salary increases. Complaint ¶ 25. (4) Dr. Ballard's challenges to a proposed freshman English syllabus which restricted a teacher's latitude in conducting the class. Ballard Deposition at 18. In addition to claiming that his less-than-average salary increases were in retaliation for protected First Amendment activity, Dr. Ballard claims that these salary increases denied him equal protection and due process. Complaint ¶¶ 23, 24. II. DISCUSSION Summary judgment is appropriate when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment bears an exacting burden of establishing that there is no dispute regarding any material fact in the case. Warrior Tombigbee Transportation Co. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir.1983). And all reasonable doubts about the facts should be resolved in favor of the non-movant. Clemons v. Doughterty County, Georgia, 684 F.2d 1365, 1369 (11th Cir.1982). A. The First Amendment Claim The threshold inquiry in this case is whether Dr. Ballard's speech involved matters of "public concern," rather than matters relating merely to Dr. Ballard's personal interest. Speech involving the former is protected, whereas speech involving the latter is not. Connick v. Myers, ___ U.S. ___, ___, 103 S.Ct. 1684, 1690, 75 L.Ed.2d 708 (1983). See Note, Connick v. Myers: Narrowing The Free Speech Right of Public Employees, 33 CATH.U.L.REV. 429 (1983). If the employee's speech cannot be characterized fairly as constituting speech on a matter of public concern, it is unnecessary for the court to scrutinize the reasons for the employee's alleged reprimand. 103 S.Ct. at 1689. Whether Dr. Ballard's speech involved a matter of public concern is to be determined by the content, form, and context of a given statement as revealed by the whole record. Id. at 1690. Additionally, the question relating to the protected status of speech is one of law; thus it is an appropriate issue to be resolved on a motion for summary judgment. Id.; Mahaffey v. Kansas Board of Regents, 562 F.Supp. 887, 888, 890 (D.Kan. 1983). In Connick v. Myers, the Supreme Court interpreted Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968), and its progeny and attempted to strike a balance between the interest of the employee, as a citizen, in commenting on matters of public concern, and the interest of the state, as an employer, in promoting the efficiency of the public services it performs through its employees. The specific question framed by the Connick Court was "whether the First and Fourteenth Amendments prevent the discharge of a state employee for circulating a questionnaire concerning internal office affairs." 103 S.Ct. at 1686 (emphasis added). The state argued that since the employee's questionnaire concerned matters relating only to internal office affairs, this 163 speech was not protected because, by definition, it did not relate to a matter of public concern. The Court agreed, reasoning that employee expression which does not relate to any matter of political, social, or other community concern is a personal, rather than a public, expression. Id. at 1690. Additionally, the court recognized that government officials should enjoy wide latitude in managing their offices, without intrusive oversight by the judiciary in the name of the First Amendment. Perhaps the government employer's dismissal of the worker may not be fair, but ordinary dismissals from government service which violate no fixed tenure or applicable statute or regulation are not subject to judicial review even if the reasons for dismissal are alleged to be mistaken or unreasonable. Id. The Court also noted that "the First Amendment does not require a public office to be run as a roundtable for employee complaints over internal office affairs." Id. at 1691 (emphasis added). Finally, the Court recognized that even in those situations where the employee's speech has a limited impact on matters of public concern, it will not necessarily fall within the protection of the First and Fourteenth Amendments. Id. at 1693-94. In sum, the Court held [W]hen a public employee speaks not as a citizen upon matters of public concern, but instead as an employee upon matters only of personal interest, absent the most unusual circumstances, a federal court is not the appropriate forum in which to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior. Id. at 1690. The Connick Court's public versus private distinction reflects the common-sense realization that government offices could not function if every employment decision became a constitutional matter. The Court rejected the proposition that all matters which transpire within a government office are of public concern, since this would mean that every remark or criticism directed against a public official would plant the seed of a constitutional case. Id. at 1691. Indeed, if a faculty member need only point to some verbal criticism or altercation concerning his college, its curriculum, or how things are run in order to convert an adverse personnel decision into a federal action, then nearly every adverse personnel decision could be reviewed by a federal court under 42 U.S.C. § 1983. The Connick decision was applied in a case remarkably similar to this case. In Mahaffey v. Kansas Board of Regents, 562 F.Supp. 887 (D.Kan.1983), a tenured professor claimed that he was punished for expressing opinions protected by the First and Fourteenth Amendments. The plaintiff's assertedly protected speech activities concerned matters such as his individual salary increases, his position on the college organizational chart, policy decisions concerning internal departmental affairs, and the identity of his superiors. The court characterized the discussion of these matters as quintessential items of individual, rather than public, concern. Further, the court noted that "the Connick [C]ourt made it plain that an individual cannot bootstrap his individual grievance into a matter of public concern either by bruiting his complaint to the world or by invoking a supposed popular interest in the way public institutions are run." Id. at 890. Accordingly, the court rejected the plaintiff's claim that this speech was protected by the First and Fourteenth Amendments. See also Leonard v. City of Columbus, 705 F.2d 1299, 1305 (11th Cir.1983) (interpreting Connick as providing less protection to complaints concerning purely internal office affairs than to those concerning matters of "public concern"). In applying the Connick test to Dr. Ballard's assertedly protected First Amendment activity, see supra p. 162, this court finds that Dr. Ballard's speech did not relate to matters of public concern and, thus, was unprotected. For example, the subject matter of Dr. Ballard's grievance which he pursued through the university's grievance procedure concerned his salary increases. An individual's salary is an issue personal 164 to the individual and has no relationship to matters of public concern. Similarly, Dr. Ballard's challenges to the manner in which he and his colleagues were assigned to teach the freshman English courses was a matter of private concern. The particular courses an individual is assigned to teach simply cannot be viewed as a matter in which the public has a legitimate interest. Accordingly, expression relating to this challenge simply does not rise to a matter of public concern. The remaining two speech activities for which Dr. Ballard claims he was retaliated against also did not involve matters of public concern. Dr. Ballard's deposition makes it unmistakably clear that these challenges involve matters relating to internal college affairs rather than to matters of political or social importmatters of public concern.[2] The first speech activity concerned a proposed freshman English syllabus. In defendant Dr. Blount's deposition he recalled that during the faculty discussion of the proposed syllabus two general challenges were raised regarding this issue, and Dr. Ballard was only one of several faculty members discussing these challenges. Blount Deposition at 15-19, 29.[3] The first challenge concerned the prescriptive nature of the syllabus; the syllabus opponents claimed that the syllabus was too rigid and that syllabus removed the flexibility with which the teachers were accustomed. Id. at 15. The second challenge concerned the procedures employed to review and approve the proposed syllabus. Apparently, one committee entrusted with the duty of initially reviewing such proposals had not been consulted. In any event, both of these challenges were addressed and resolved; the syllabus was eventually adopted, but only after it had gone through the correct administrative procedures and after the prescriptive tone of the syllabus was modified. The plaintiff claims that this speech was related to a matter of public concern, since the decision regarding the syllabus would have an eventual, derivative effect on the freshman English students. Taken to its logical conclusion, the plaintiff's argument means that any time a person's speech will have an effect on the public, regardless of how small or unlikely that effect may be, that speech relates to a matter of public concern. This was a specific concern of the Connick Court, and the Court wisely rejected this identical argument. Accordingly, this court concludes that any speech relating to the discussion of the syllabus concerned matters of internal college affairs and did not relate to matters of public concern. The final speech activity for which Dr. Ballard claims he was retaliated against concerned his objection to the administrative decision to deny tenure to a colleague, Tina Sizemore. For the reasons stated above, this court concludes that absent unusual circumstances an administrative decision to grant or deny tenure to an individual 165 is not a matter of public concern, and an individual challenging this administrative decision is without First Amendment protection. In sum, the court concludes that the speech for which Dr. Ballard alleges he was retaliated against, simply did not relate to matters of public concern and therefore was not protected. B. The Due Process and Equal Protection Claims In his remaining constitutional claims Dr. Ballard asserts that the defendants' decision to award him less than the average annual salary increases violated his due process and equal protection rights. In Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), the Supreme Court identified four prerequisites necessary to assert a violation of the due process clause. These prerequisites include (1) The conduct complained of must have been committed by a person acting under color of state law; (2) There must be a constitutionally protected property or liberty interest at issue; (3) There must have been a deprivation of this protected interest; and (4) The deprivation of this interest must have occurred without due process of law. Id. at 535-37, 101 S.Ct. at 1913-14. Although it is undisputed that the first requirement is satisfied here, the court finds that the remaining three requirements are not satisfied. In Doyle v. University of Alabama in Birmingham, 680 F.2d 1323 (11th Cir.1982), the Eleventh Circuit rejected the argument that a university professor had a protected property or liberty interest in a merely recommended salary raise. The plaintiff's proposed salary increase was subsequently disapproved because of her perceived unsatisfactory teaching performance. This court finds Doyle dispositive of the second and third Parratt requirements. The merit salary increases at issue in this case were by definition discretionary, designed to serve as a reward for an acceptable teaching performance. There merit salary increases were, at best, expectations rather than entitlements, and this court finds that these expectations were not protected property or liberty interests for due process purposes. In addition to failing to meet the second and third requirements of Parratt, Dr. Ballard also fails to meet the final Parratt requirementa showing that he was not afforded due process in connection with the decision to award him his less-than-average salary increases. Due process merely requires an opportunity for a hearing appropriate to the nature of the case, Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 656-57, 94 L.Ed. 865 (1950), granted at a meaningful time and in a meaningful manner. Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965). See also Clark v. Whiting, 607 F.2d 634, 644-45 (4th Cir.1979) (the amount of due process required in a case where a teacher alleges he was denied a promotion is far less than that necessary in a trial-type situation). Dr. Ballard appealed his salary grievance both within the English department and to a college-level grievance committee. At these hearings Dr. Ballard appeared with counsel, was afforded the right to give testimony and present evidence, and was entitled to a determination based on the record. This court finds that these hearings, and the procedural and substantive rights afforded therein, adequately afforded Dr. Ballard his due process rights.[4] 166 Clinging to the last straw, Dr. Ballard asserts that his less than average annual salary increases violated the Equal Protection Clause of the Fourteenth Amendment. In order to establish a violation of the Equal Protection Clause based upon the ad hoc action of state officials, a plaintiff must demonstrate that the action was prompted by some racial, or other class-based, invidiously discriminatory animus. Griffin v. Breckenridge, 403 U.S. 88, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971). See also Mahaffey v. Kansas Board of Regents, 562 F.Supp. 887, 890. It is this burden that Dr. Ballard fails to satisfy. At the outset, the court notes that Dr. Ballard does not allege that any other member of the English department faculty is similarly situated for equal protection purposes. Nor does he assert that he is a member of any traditional discrete class (e.g., race, sex, or age) that either was or may be subjected to invidious discrimination. Rather, he attempts to squeeze himself into a putative class of all faculty members working under the merit pay raise system. This attempted classification does violence to the dictate of Griffin, since a relaxed classification would result in the very generalized federal tort law that the Supreme Court sought to avoid in Griffin. See 403 U.S. at 102, 91 S.Ct. at 1798. Accordingly, this court refuses to permit Dr. Ballard to prosecute his individualized grievance in the guise of the Equal Protection Clause. Additionally, this court finds that the merit pay system is constitutionally permissible, since it is substantially related to a legitimate and important objective of the university. See Stone v. Board of Regents of the University System of Georgia, 620 F.2d 526, 529 n. 8 (5th Cir.1980). III. SUMMARY In summary the court GRANTS the defendants' motion for summary judgment. NOTES [1] These last three claims are dubious, since Dr. Ballard conceded in his deposition that he never sought to be appointed to any faculty committee, that he did receive release time, and that he never objected to the summer teaching duties to which he was assigned. Ballard Deposition at 9, 42-45. [2] In pertinent part Dr. Ballard's Deposition reads as follows: Q. What [allegedly protected] criticisms did you make that you feel are a basis of this action? A. There were two or three that stand out in my mind that are particularly significant, but there were a number of minor ones all along. Some of the major ones had to do with the development over a period of years with regards to the freshman English syllabus adoption, new syllabus adoption, and there were the events that had to do with the letter I wrote to Dr. Blount on Tina Sizemore's decision or decision about Tina Sizemore. Then there was a specific time when I again, a sequence of events, but a particular event when I talked to the advisory council about the policies of how teachers were assigned in the freshman program, who taught it and under what conditions and so forth. As I say, there were a number of things, all complex in themselves, and there were other actions as well, other times as well. Q. Basically could you summarize and say that these are all to your perception constructive criticism of department policies in the functioning of the English department? A. Yes. Q. As opposed to positions on matters of public or political issues or things of that sort? A. Yes. Ballard Deposition at 19-20. [3] Dr. Blount's statements relating to the proposed English syllabus have neither been challenged nor contradicted by the plaintiff and therefore will be accepted as true. [4] Despite these procedural and substantive safeguards, Dr. Ballard was unsuccessful at both appellate levels. The appellate committees found numerous reasons supporting Dr. Ballard's limited salary increase, including the high attrition rate in Dr. Ballard's English courses, Dr. Ballard's incomplete and nonconstructive grading of student papers, and the numerous student complaints relating to Dr. Ballard's teaching performance. In sum, these appellate committees found as reasonable defendant Dr. Blount's conclusion that Dr. Ballard was performing inadequately and did not deserve the salary increase.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1622064/	853 So.2d 756 (2003) A.J. BRADFORD, et al., Plaintiffs/Appellees/Cross-Appellants, v. ONSHORE PIPELINE CONSTRUCTION CO., INC., Defendants/Appellants/Cross-Appellees. No. 37,421-CA. Court of Appeal of Louisiana, Second Circuit. August 22, 2003. Rehearing Denied September 18, 2003. 757 Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., by Carl D. Rosenblum, Alida C. Hainkel, Liskow & Lewis, by Patrick W. Gray, Lafayette, Shotwell, Brown & Sperry, by Edel F. Blanks, Jr., Monroe, for Defendant/Appellants, Eland Energy, Inc. and Delhi Package I, Ltd.; and for Defendants/Appellees, Sun Operating Limited Partnership and Oryx Energy Company. Hayden, Moore & Ryan, by Gregory Scott Moore, Lovell E. Hayden, III, for Plaintiffs/Appellants, A.J. Bradford and Vinyard and Sons, Inc. and for Plaintiffs/Appellees Lewis Hubbard and Herman Sandford. Before BROWN, STEWART & PEATROSS, JJ. PEATROSS, J. This appeal arises from a trial court judgment in favor of the plaintiffs, Vinyard and Sons Oil and Gas and A.J. Bradford (collectively "Plaintiffs"), and against defendants, Eland Energy, Inc., individually and as managing general partner for Delhi Package I, LTD (collectively "Eland Energy") and Onshore Pipeline Construction Co., Inc. ("Onshore"); and dismissing the claims of Plaintiffs against defendants, Sun Operating Limited Partnership ("Sun Limited") and Oryx Energy Company ("Oryx Energy"). Both Plaintiffs and defendant Eland Energy now appeal the judgment of 758 the trial court. For the reasons stated herein, we affirm in part and reverse in part. FACTS On July 15, 1987, Sun Limited entered into a gas purchase contract with Vinyard and Sons Oil and Gas to purchase gas produced from gas wells identified as Vinyard No. 1, Vinyard No. 2, Vinyard B No. 1, Vinyard C No. 1 and Vinyard D No. 1.[1] These wells are located in what is known as the "Big Creek Field." The "Big Creek Gathering System" gathered the gas produced from the Big Creek Field and transported it to the Delhi gas processing plant.[2] On September 24, 1990, Sun Limited entered into a gas purchase contract[3] with A.J. Bradford to purchase gas from a well identified as Ben S. Pipes No. 1.[4] Meters were installed near the wells owned by both Plaintiffs and the meters became the mutually agreed upon delivery site. After the gas passed through the meter, it became the property of the buyer. On December 31, 1990, Sun Limited sold the Delhi Plant, Big Creek Gathering System and its gas purchase contracts, including Plaintiffs' contracts, to Eland Energy. As a result of this contract assignment, Eland Energy assumed the obligation to purchase gas from Plaintiffs' wells under the gas purchase contracts. On May 24, 1991, the gas purchase contract between Sun Limited and A.J. Bradford was amended by Eland Energy and A.J. Bradford to add to the original gas purchase contract the gas wells identified as Lewis Hubbard No. 1, Lewis Hubbard No. 2 and Lewis Hubbard III No. 1.[5] Later, on February 25, 1992, Eland Energy transferred the Big Creek Gathering System to Onshore. This assignment stated that it was made "subject to" all of the terms and 759 conditions of the gas purchase contracts existing as of January 1, 1992. Eland Energy retained ownership of the Delhi Plant and the gas purchase contracts. Subsequently, Onshore made a demand on Plaintiffs to sign a new agreement that would result in a transportation fee of fifty cents per MCF[6] for all gas passing through the Big Creek Gathering System. Plaintiffs were also asked to assume line loss of the gas as it passed through the Big Creek Gathering System, which changed the agreement between the parties that, after the gas passed through the meter, it became the property of the buyer.[7] After receiving these demands, Plaintiffs asked to meet with representatives from Eland Energy and Onshore. On March 25, 1992, Eland Energy and Onshore met with Plaintiffs. Refusing to sign the new agreement with Onshore, Plaintiffs demanded that Eland Energy honor the existing contracts to purchase the gas as agreed upon in those contracts. Only one day later, on March 26, 1992, Onshore forwarded a letter to Plaintiffs advising that the gas flow through the meters at their wells was insufficient; and, pursuant to the Unprofitable Gas Clause in the existing gas purchase contracts, Onshore would no longer purchase any gas from them effective April 1, 1992, and the meters would be removed. The Unprofitable Gas Clause states: Buyer agrees to take gas testing more than 2.50 GPM except as herein provided. Seller shall have the right to dispose of any gas not taken or paid for by Buyer, provided that Buyer shall have the right to take any or all such gas at any time hereafter conditioned upon Buyer giving Seller at least thirty (30) days notice of its election to do so. In the event the gas from any well or wells, or from any point of separation of the oil and gas, on said leases becomes insufficient in volume or liquids content, or for any other cause becomes unprofitable for the extraction of liquids therefrom, Buyer shall have the right to cease taking such gas so long as such condition exists. It is further provided that if any time the volume and/or liquids content of the gas available to Buyer, or if any cause beyond its control, shall render the operation of said plant unprofitable, Buyer may, by thirty (30) days written notice and payment, or tender, to seller of Ten Dollars ($10.00), cancel this contract. In response to Onshore's letter, Plaintiffs closed the valves on their wells in order to prevent damage to the wells. Eland Energy and Onshore have refused to purchase any gas from Plaintiffs' wells since the sale of the Big Creek Gathering System in February 1992.[8] On June 23, 1992, Plaintiffs brought this lawsuit alleging a breach of contract claim against Onshore. Plaintiffs later amended their petition to include Eland Energy, 760 Sun Limited and Oryx Energy[9] as additional defendants, alleging that either Eland Energy or Sun Limited/Oryx Energy failed or refused to purchase gas from their wells as required by the gas purchase contracts. Plaintiffs argued that they had suffered loss of revenue due to the refusals of Sun Limited and Eland Energy to honor their contractual obligations to purchase the gas from their wells. In addition to loss of gas revenue, Vinyard and Sons Oil and Gas asserted that it had sustained a loss of oil revenue because it was unable to produce its oil without the production and marketing of the gas from its wells. In January 1996, Plaintiffs sent a letter to Eland Energy indicating that they intended to commence delivering their gas on February 1, 1996, and threatened to seek injunctive relief if the delivery was interrupted. Eland Energy, in turn, sent written notice to Plaintiffs cancelling the gas purchase contracts after invoking the Unprofitable Gas Clause's termination provision, with checks attached to the notice for $10 to each Plaintiff. A trial on the merits was held on March 12, March 13, April 30 and August 16, 2001. At trial, Eland Energy argued that it and Onshore were entitled to cancel the gas purchase contracts under the Unprofitable Gas Clause in 1992 and that it did not have to give 30 days notice to Plaintiffs. The trial judge did not agree with that argument. Specifically, the trial judge found that the Unprofitable Gas Clause was somewhat ambiguous concerning the notice requirements and that it could easily be construed to require a 30-day notice. More importantly, the trial judge concluded that the profitability of the gas had nothing to do with Eland Energy's decision to terminate the contracts in this case. In support of this conclusion, the trial judge cited the testimony of Thomas H. Hilton, the operations manager for Eland Energy, who stated that Eland Energy only wanted the oil wells on the property and Eland Energy did not intend to process gas, other than lift gas to get oil, at the time it purchased the Delhi properties. At the conclusion of the trial, the trial judge found that Eland Energy committed a bad faith breach of its obligation to purchase gas from the Plaintiffs' wells under the terms of the gas purchase contracts, holding that Eland Energy had a right to sell the gathering system, but it had an obligation to purchase the gas from Plaintiffs' wells at the meters located on their property.[10] Further, he found that Onshore attempted to unilaterally change the terms of Plaintiffs' gas purchase contracts and, in effect, forced them to shut-in their wells. The trial judge did find, however, that Eland Energy effectively cancelled the gas purchase contracts with Plaintiffs under the Unprofitable Gas Clause after sending them a letter on February 12, 1996, and tendering to them the requisite $10. The cancellation was effective 30 days after the date of the letter. It was noted by the 761 trial judge that Eland Energy had given the proper 30-day notice of termination to Plaintiffs. The Plaintiffs were awarded damages for loss of production revenue from April 1, 1992, through March 1996. At trial, both Plaintiffs and Eland Energy provided expert testimony as to the amount of damages at issue. Eland Energy argued that the damages were minimal and that Vinyard and Sons Oil and Gas could not claim for loss of oil production because the contracts were gas purchase contracts. The trial judge found, however, that the trial testimony established that Vinyard and Sons Oil and Gas could only produce oil if the gas was produced and purchased. Eland Energy further argued that it acted in good faith when the gas purchase contracts were terminated and that Plaintiffs' recovery was limited to foreseeable damages and the loss of oil revenue was not foreseeable. The trial judge found that Eland Energy was not in good faith because it interjected Onshore into the gas purchase contracts; was aware of Onshore's activities; should have required Onshore to honor the existing contracts; allowed Onshore to attempt to unilaterally change the terms of the existing contracts, in effect, shutting-in Plaintiffs' wells; and Vinyard and Sons Oil and Gas lost oil revenue was foreseeable. Eland Energy further argued that Plaintiffs failed to mitigate their damages by selling their gas to Onshore at a reduced amount. The trial judge rejected that argument because Plaintiffs were not given time to produce their gas at a reduced amount, considering the fact that Onshore sent the termination letter to Plaintiffs the day after meeting with them. The expert for Plaintiffs calculated damages for loss of production from Plaintiffs' wells without deducting costs of production. The expert for Eland Energy made similar calculations for the loss of production, but deducted $400 per month per well as costs of production.[11] The trial judge found that it was the Plaintiffs who performed most of the duties required for maintenance and production with these wells, whereas the estimates by the expert for Eland Energy included reliance on outside interests to perform the work and expenses, such as office space, secretarial staff and other expenses that small, independent producers such as Plaintiffs would not incur. Using the calculations provided by Plaintiffs' expert, the trial judge found that Vinyard and Sons Oil and Gas would only have $1,100 per year per well in actual production cost and that A.J. Bradford would have no production costs because he performed virtually all his own work on the wells. The trial judge deducted from the damages the actual production costs for the wells owned by Vinyard and Sons Oil and Gas and severance taxes on the oil produced. Eland Energy further asserted that Plaintiffs' recovery must be limited only to the percentage of their ownership as the mineral lessees. The trial judge was not persuaded by this argument, however, finding that the damages awarded must include the interest of the mineral lessors (the landowners). Citing the obligations of the lease contracts requiring Plaintiffs to pay the mineral lessors, the trial judge found that, if the wells had produced gas and Eland Energy had paid for the production, Eland Energy would not have been entitled to deduct the interest of the mineral lessors when it paid Plaintiffs. The trial judge found that, since Plaintiffs, as mineral lessees, are required to disburse the proceeds to the mineral lessors, 762 then damages, including both the interest of the mineral lessees and the interest of the mineral lessors, must be awarded. Judgment was awarded to Vinyard and Sons Oil and Gas in the amount of $30,624.08 for damages resulting from its loss of gas and oil production.[12] Further, judgment was awarded to A.J. Bradford in the amount of $49,224.68 for loss of gas production.[13] In calculating the damages, the trial judge adopted the calculation of Plaintiffs' expert, finding that only limited costs and expenses of production were to be deducted from the damages. The damages awarded by the trial judge were calculated to include not just the interest of the Plaintiffs as mineral lessees, but also the interest of the mineral lessors (the landowners of the property). Damages were awarded to include interest from the date of judicial demand. The trial judge dismissed Sun Limited and Oryx Energy from the case. Following the judgment, Eland Energy moved for a new trial, but this motion was denied. Eland Energy now appeals the judgment of the trial court, raising the following assignments of error (verbatim): 1. Although the trial court correctly found that it was unprofitable for Eland to take plaintiffs' gas, it erred by rewriting a contractual provision to improperly impose a thirty-day notice requirement on Eland, disregarding Eland's contractual right to cease taking gas, without notice, based on unprofitability; 2. In the alternative, the trial court erred in calculating damages for lost oil and gas production without deducting proper and reasonable costs and expenses to be incurred by such production; 3. Again alternatively, the trial court erred in awarding damages to plaintiffs for property interests in the oil and gas leases that plaintiffs did not own; and 4. Finally, in the alternative, the trial court erred in awarding legal interest running from the date of judicial demand on plaintiffs' prospective breach of contract damages. Plaintiffs also appeal the judgment of the trial court, raising the following assignments of error (verbatim): 1. The trial court committed reversible error when it failed to find Sun liable for the bad faith breach of contract; and 2. The trial court committed reversible error by finding that Eland had a right to cancel the plaintiffs' contracts on March 1996 by written notice and tender of $10.00 when the Delhi plant had excess capacity to process additional gas. DISCUSSION Termination of Gas Purchase Contract Eland Energy argues that the trial judge did not properly interpret and apply the Unprofitable Gas Clause of the gas purchase contracts between it and Plaintiffs and that it should not have been required to give 30 days notice to Plaintiffs 763 before suspending taking gas from their wells. Further, Eland Energy contends that the standard of review for an appellate court in interpreting a contract requires the court to independently determine whether the trial court's decision was legally correct or legally incorrect. Irrespective of Eland Energy's arguments, however, the trial judge did not find that the gas extracted from Plaintiffs' wells had become unprofitable to Eland Energy, but, instead, found that the profitability of the gas extracted from Plaintiffs' wells actually had nothing to do with Eland Energy's decision to terminate the contracts in this case. If unprofitability had nothing to do with Eland Energy's decision, then it is unnecessary to interpret the Unprofitable Gas Clause in this case. We agree with the trial judge's finding of fact and we will review the trial court's judgment under the manifest error standard of review. A court of appeal should not set aside a trial court's finding of fact in the absence of manifest error or unless it is clearly wrong. Stobart v. State through Dept. of Transp. & Development, 617 So.2d 880 (La.1993). The reviewing court must do more than just simply review the record for some evidence which supports or controverts the trial court's findings; it must, instead, review the record in its entirety to determine whether the trial court's finding was clearly wrong or manifestly erroneous. Id. The issue to be resolved by a reviewing court is not whether the trier of fact was right or wrong, but whether the fact finder's conclusion was a reasonable one. Cosse v. Allen-Bradley Co., 601 So.2d 1349 (La. 1992). If the trial court's findings are reasonable in light of the record reviewed in its entirety, the court of appeal may not reverse, even if convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Housley v. Cerise, 579 So.2d 973 (La.1991) (quoting Sistler v. Liberty Mutual Ins. Co., 558 So.2d 1106 (La.1990)). Eland Energy cannot have the Unprofitable Gas Clause applied in the case sub judice unless it proves that unprofitability was the reason it terminated the gas purchase contracts with Plaintiffs. In reviewing the record, we find that Eland Energy did not prove that, subsequent to April 1, 1992, when the contracts were terminated, it was unprofitable for it to extract gas out of Plaintiffs' wells and it did not prove that it ceased purchasing gas from Plaintiffs' wells for that reason. The great weight of the evidence supports the trial judge's conclusion in this case. The President of Eland Energy, Tim Allen ("Allen"), told Plaintiffs that Eland Energy needed as much gas as it could get from Plaintiffs. After the gathering system was sold to Onshore, Allen told Plaintiffs that they would have to go through Onshore to get their gas to the Delhi Plant. Eland Energy attempted to change its contractual obligations to Plaintiffs by placing Onshore in the middle of the transactions with Plaintiffs. When Onshore began dealing directly with Plaintiffs, Onshore attempted to change the contract by adding the extra charge for using the gathering system. Eland Energy asserts that, very soon after it acquired the right to purchase gas from Plaintiffs' wells, it recognized that the deal was unprofitable. The facts of the case do not support this assertion. If the deal was unprofitable, then Eland Energy certainly would have enforced the Unprofitable Gas Clause immediately upon discovering this fact rather than continuing to take gas from Plaintiffs' wells.[14]764 Eland Energy continued, however, to take gas from Plaintiffs' wells for more than a year and it amended the contract with A. J. Bradford to add the three "Hubbard" wells, which were also in the Big Creek Field. Further, if Plaintiffs' wells were unprofitable as Eland Energy claims, then surely Onshore would not have purchased the gathering system without assurances from Plaintiffs before the purchase was completed that a transportation fee would be acceptable to keep the gathering system and plant operational. In addition, in Onshore's purchase of the gathering system, it agreed to allow Eland Energy to continue to take ten percent of the price paid for the gas. This fact does not support the argument that this deal was unprofitable; because, indubitably, if profits were non-existent, then, from the very beginning of the assignment, Onshore would not have wanted to give ten percent to Eland Energy. Eland Energy asserts that the Delhi Plant as a whole became unprofitable to operate; but, if it were to cancel its contract with Plaintiffs on this basis, then it had to give 30 days notice to Plaintiffs and tender $10. The facts support the conclusion that Eland Energy replaced itself with Onshore in an attempt to change the contractual obligations of the parties. On March 24, 1992, Onshore sent a letter to Plaintiffs informing them of the additional charge of using the gathering system, a charge that did not exist in the original gas purchase contracts between Sun Limited and Plaintiffs. Onshore also wanted Plaintiffs to assume the line loss of any gas escaping from the gathering system while the gas traveled to the Delhi Plant. At this time, no mention of unprofitability was made to Plaintiffs concerning their wells. On March 25, 1992, a meeting was held between Eland Energy, Onshore and Plaintiffs. Onshore discussed with Plaintiffs various alternatives to the terms of the original contract, but Plaintiffs rejected any changes in the contract. It was only one day later, on March 26, 1992, that Onshore sent a letter to Plaintiffs stating that taking gas from their wells was unprofitable. This is the first mention ever made of unprofitability. Onshore and Eland Energy attempted to change the contract; and, when the Plaintiffs refused to approve the changes, it was only then that unprofitability became an issue. We agree with the trial judge that profitability had nothing to do with the decision to terminate the contracts with Plaintiffs. Eland Energy's first assignment of error is without merit. Damages Awarded An award for damages should not be disturbed by a reviewing court absent a showing of a clear abuse of discretion vested in the trial court. Carroll v. St. Paul Insurance Company, 550 So.2d 787 (La.App. 2d Cir.1989). The appropriate procedure for testing whether the trier of fact has abused its discretion by making an excessive award is to determine whether the award can be supported under the interpretation of the evidence most favorable to the plaintiff which reasonably could have been made by the fact finder. Graham v. Edwards, 614 So.2d 811 (La.App. 2d Cir.1993), writ denied, 619 So.2d 547 (La.1993). Damages and Production Costs In Eland Energy's second assignment of error, it argues that the trial judge erred by not deducting the correct production costs from the damages awarded 765 to Plaintiffs. Finding that the Plaintiffs' expert witness established actual costs versus the estimated costs provided by Eland Energy's expert witness, the trial judge adopted the actual costs. We agree with the trial judge's conclusion. The trial judge deducted no production costs from the damages to A.J. Bradford, finding that, due to his extensive experience in dealing with gas wells, he was able to perform the work himself on his wells. It was established at trial that these wells were only gas wells and did not develop paraffin buildup that occurs in oil wells. Further, the trial judge deducted $1,100 per year per well for the Vinyard and Sons Oil and Gas wells and deducted that cost from the damages awarded to Vinyard and Sons Oil and Gas. Plaintiffs' expert testified at trial that these were the actual production costs for these wells. Vinyard and Sons Oil and Gas was able to provide much of the labor itself on its wells. Moreover, Eland Energy's expert witness estimated the production cost and included costs that small operators such as Plaintiffs would not normally incur. Weighing the credibility of both experts and the testimony of Plaintiffs, the trial judge found Plaintiffs' expert to be more credible. The trial judge did not abuse his discretion in awarding damages, deducting only limited production costs based on the calculations of Plaintiffs' expert; and, therefore, Eland Energy's second assignment of error is without merit. Damages Including Interests of Mineral Lessors Eland Energy argues in its third assignment of error that the trial judge should not have included the interest of the mineral lessors (the landowners of the property) when damages were awarded. Further, Eland Energy asserts that the mineral lessors were not parties to this lawsuit and that the mineral lessees, the Plaintiffs, were given damages based on interests that they did not own. In addition, Eland Energy contends that royalties paid to the mineral lessors must be paid only when gas is produced; and, because there was no production here, then no royalties are owed under the leases. The trial judge did not agree with Eland Energy's arguments, finding that Plaintiffs are still obligated to pay the mineral lessors out of the damages received from this lawsuit. We agree with the trial judge's finding. First, the Royalty Clause in the gas purchase contracts states: Seller agrees to account and pay to the lessors, royalty owners and owners of other interests under the committed leases, in strict accordance with the applicable agreements, the royalty and other interests in the gas sold and delivered hereunder to Buyer. The Oil, Gas and Mineral Lease agreed to by the mineral lessors and the mineral lessees states, in pertinent part, in paragraph four: The royalties to be paid by Lessee are... on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale.... (Emphasis added.) In Frey v. Amoco Production Company, 603 So.2d 166 (La.1992), the supreme court held that the mineral lessee, after receiving a settlement in a dispute with the gas buyer, had to pay the mineral lessor his interest from the damages awarded to the mineral lessee. The court found that: The lease (between the mineral lessor and the mineral lessee) represents a bargained-for exchange, with the benefits flowing directly from the leased premises to the lessee and the lessor, the latter via royalty. An economic benefit accruing from the leased land, generated solely by virtue of the lease, and 766 which is not expressly negated, see La. R.S. 31:3, is to be shared between the lessor and lessee in the fractional division contemplated by the lease. Amoco Production Company, the mineral lessee in this case, made the same argument that Eland Energy now makes before us, that there must be an actual sale of gas produced in order for the mineral lessor to be included in the award of damages. The supreme court rejected this argument and we are constrained to follow the supreme court's holding on this issue. The court in Frey, supra, further found that the settlement was part of the "amount realized" portion of the mineral lease and, therefore, subject to the lessor's royalty clause.[15] Moreover, the court found that the proceeds of the settlement constituted economic benefits which are derivative of the mineral lessee's right to develop and explore the leased property, a right conferred by and dependent upon the lease between the mineral lessor and mineral lessee. The court cited La. R.S. 31:122 in support of its analysis. La. R.S. 31:122 provides, in pertinent part: A mineral lessee is ... bound to perform the contract in good faith and to develop and operate the property leased as a reasonably prudent operator for the mutual benefit of himself and his lessor. (Emphasis added.) The mineral lessor assumes a passive role after it enters into a lease with a mineral lessee and the lessee assumes a superior position according it exclusive control over the development and management of the property for the production of minerals. This development and management includes the exclusive ability to sue for breach of contract if the purchaser of the gas breaches its contract with the mineral lessee, as occurred in the instant case. The court in Frey, supra, held that the mineral lessee should not be able to exclusively enjoy the benefits of the settlement while refusing to share the benefits with the mineral lessor; and, thus, the settlement inures to the mutual benefit of both the mineral lessee and the mineral lessor. We reject Eland Energy's arguments here and find that the trial judge correctly awarded damages to Plaintiffs by including damages for the mineral lessor. Eland Energy's third assignment of error is without merit. Damages for Legal Interest from Date of Judicial Demand Eland Energy argues that the trial judge erred when Plaintiffs were awarded damages with legal interest from the date of judicial demand. In support of its argument, Eland Energy cites the case of Corbello v. Iowa Production, 02-0826 (La.2/25/03), 850 So.2d 686. Eland Energy argues that the supreme court in Corbello, supra, found that legal interest is recoverable on debts arising ex contractu (debts arising from a contract) from the time they become due and the debt in this case arose from a contract. Further, Eland Energy contends that the decision in Corbello, supra, expressly overruled the existing supreme court precedent found in Trans-Global Alloy Limited v. First National Bank of Jefferson Parish, 583 So.2d 443 (La.1991)[16] and Alexander v. Burroughs Corporation, 359 So.2d 607 (La.1978). We do not agree. In Trans-Global Alloy Limited, supra, the supreme court held that, in a breach of contract case, a prevailing party is entitled 767 to legal interest from date of judicial demand even though damages are not ascertainable until the date of judgment. The supreme court in Alexander, supra, similarly held that, in a breach of contract case, a plaintiff is entitled to legal interest from date of judicial demand. The court in Alexander, supra, rejected the defendant's argument that the plaintiffs' suit was grounded in contract and that La. 13:4203[17] did not apply. The court found that it did not matter that the suit had a contractual rather than a delictual source. We find that the supreme court in Corbello, supra, did not expressly overrule Trans-Global Alloy Limited, supra, and Alexander, supra. The Corbello, supra, court did not hold that interest is recoverable on debts arising in all breach of contract cases only from the time they become due. The court's general discussion of ex delicto and ex contractu in Corbello, supra, was just that, a general discussion of those two theories under which many causes of action exist. In addition, the discussion was based on the citation to a line of very specific contracts cases and a very specific code article, La. C.C. art.1938. The issue in the instant case does not concern that code article, nor does it concern the issue prevailing in Corbello, supra, or the cases cited therein. The trial judge in the case sub judice did not abuse his discretion in any of the damages awarded to Plaintiffs; and, therefore, Eland Energy's final assignment of error is without merit and interest in this case is due from date of judicial demand. Dismissal of Sun Limited from Lawsuit Plaintiffs argue on cross appeal that the trial judge should not have dismissed Sun Limited from the lawsuit. Even though Sun Limited sold the gas purchase contracts to Eland Energy, the Plaintiffs assert that they never released Sun Limited from any of its obligations under the contracts. As previously stated, the Assignment Clause of the gas purchase contracts provides, in pertinent part, that: This contract shall extend to and be binding upon the parties hereto, their heirs, administrators, successors and assigns. Further, as previously noted, La. C.C. art. 1821 provides, in pertinent part: An obligor and a third person may agree to an assumption by the latter of an obligation of the former. The obligee's consent to the agreement does not effect a release of the obligor. This is not a case where novation has occurred. La. C.C. art. 1880 provides: The intention to extinguish the original obligation must be clear and unequivocal. Novation may not be presumed. When a new obligor is substituted for a prior obligor, novation takes place only when the prior obligor is discharged by the obligee. See La. C.C. art. 1882. We find no evidence in the record before us that Plaintiffs, as the obligees, released or discharged Sun Limited, as the original obligor, from any of its obligations under the gas purchase contracts. Without such a release or discharge, Sun Limited continues to remain liable to Plaintiffs. The gas purchase contracts were freely assignable, but the law in Louisiana sets forth that, when an obligation is assigned, the original obligor is not released or discharged unless expressly done so by the obligee. We find merit in Plaintiffs' first assignment of error and, therefore, hold that the trial judge committed reversible error in dismissing Sun Limited from this lawsuit. 768 Excess Capacity of Plant and Right to Cancel Contracts Plaintiffs contend that the trial judge erred in finding that Eland Energy had a right to cancel the gas purchase contracts in 1996 even though the Delhi Plant had excess capacity to continue to take gas from Plaintiffs' wells. The trial judge found that Eland Energy effectively cancelled the gas purchase contracts in 1996. Effective cancellation would occur only if Plaintiffs' gas wells were unprofitable. The trial judge applied the Unprofitable Gas Clause of the contract to uphold Eland Energy's cancellation of the contract. Irrespective of the Unprofitable Gas Clause, Plaintiffs argue that the Obligation to Take Clause preempts the Unprofitable Gas Clause. The Obligation to Take Clause of both contracts states: Any other provision herein to the contrary notwithstanding, Buyer, acting for itself and as agent of each of the other owners of the gasoline plant as provided herein above agrees to take gas hereunder when and only when there is sufficient excess capacity in said plant to process such gas. Excess capacity as herein used shall mean plant capacity over and above that required to process all the casinghead gas produced by the owners of said plant. In the event of excess capacity, Buyer agrees to take ratably from all of the gas connected to its plant produced by Sellers not owning an interest in the plant. It is further provided that if at any time the pressure at the point of delivery exceeds thirty (30) psig, Buyer shall have no obligation to take said gas. Plaintiffs' contention is that, even if the gas from their wells is unprofitable, Eland Energy still must take their gas if Eland Energy's gas plant has excess capacity. We find that this argument would lead to an absurd conclusion. La. C.C. art.2049 provides: A provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not one that renders it ineffective. Further, La. C.C. art.2050 provides: Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole. The Unprofitable Gas Clause of the gas purchase contracts and the Obligation to Take Clause arguably conflict with each other. In interpreting the meaning of each clause, however, we find that they are distinct and can coexist with each other to make the contract effective as a whole. The Unprofitable Gas Clause is designed to cancel the contract if the Plaintiffs' wells become unprofitable to the Buyer of the gas. This is separate and distinct from the intent of the Obligation to Take Clause, which has to do with excess capacity in the plant. La. C.C. art.2046 further provides: 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. (Emphasis added.) We find that, if the Obligation to Take Clause were to preempt the Unprofitable Gas Clause, then absurd consequences would occur. Eland Energy would have to take Plaintiffs' gas in infinity as long as its plant had excess capacity to take the gas, even though Plaintiffs' gas wells were unprofitable. In effect, this theoretically could lead to Eland Energy's insolvency if it had to continue to take unprofitable gas forever. The trial judge found that Eland Energy had effectively cancelled the contracts with Plaintiffs in 1996 under the Unprofitable Gas Clause. The Obligation to Take Clause does not preempt the Unprofitable Gas Clause; and, thus, Plaintiffs' final assignment of error is without merit. *769 CONCLUSION For the foregoing reasons, the judgment of the trial court in favor of Plaintiffs, Vinyard and Sons Oil and Gas and A.J. Bradford, is affirmed as to the liability of Defendants, Eland Energy and Onshore, to Plaintiffs, and as to all damages, including interest from date of judicial demand, awarded for their loss of oil and gas production. Further, the judgment of the trial court is affirmed as to its finding that Eland Energy effectively cancelled the gas purchase contracts in 1996. The judgment of the trial court is reversed as to its dismissal of Sun Limited from this lawsuit. Costs of this appeal shall be divided one-third (1/3) to Plaintiffs, Vinyard and Sons Oil and Gas and A.J. Bradford, and two-thirds (2/3) to Defendants, Eland Energy, Inc. and Sun Limited. AFFIRMED IN PART AND REVERSED IN PART. APPLICATION FOR REHEARING Before BROWN, WILLIAMS, STEWART, PEATROSS, and DREW, JJ. Rehearing denied. NOTES [1] Frank Ray Vinyard, Sr. and Audie Mae Vinyard entered into Oil, Gas and Mineral Leases with Vinyard and Sons Oil and Gas whereby the property on which the wells were located was leased to Vinyard and Sons Oil and Gas for mineral exploration. Vinyard and Sons Oil and Gas was given the right to enter into gas purchase contracts with potential buyers for gas taken out of all five wells. Mr. and Mrs. Vinyard reserved a one-half (1/2) mineral royalty in Vinyard B No. 1, Vinyard C No. 1 and Vinyard D No. 1, and a one-fifth (1/5) mineral royalty in Vinyard No. 1 and Vinyard No. 2. [2] The Delhi Plant was owned by Sun Limited. The Delhi Plant housed equipment that processed (extracted liquids from) the gas delivered to it. [3] The gas purchase contracts for both Plaintiffs are identical. [4] Ben Scott Pipes, Jr., Balfour Pipes, Guy C. Williamson, Ethel Williamson, Durwood Russell Jinks, Martha Jinks, the First Republic Bank and Sherry Lorraine Silk entered into an Oil, Gas and Mineral Lease with A.J. Bradford whereby their property was leased to A.J. Bradford for mineral exploration. A.J. Bradford was given the right to enter into gas purchase contracts with potential buyers for gas taken out of the gas well known as Ben S. Pipes No. 1. The aforementioned lessors reserved a three-sixteenths (3/16) mineral royalty in Ben S. Pipes No. 1. [5] Lewis Hubbard, III and Laura Hubbard entered into Oil, Gas and Mineral Leases with Lewis Hubbard, Jr. and Doris Hubbard whereby their property was leased to Lewis Hubbard, Jr. and Doris Hubbard for mineral exploration. Lewis Hubbard, Jr. and Doris Hubbard were given the right to enter into gas purchase contracts with potential buyers for gas taken out of the gas wells known as Lewis Hubbard No. 1, Lewis Hubbard No. 2 and Lewis Hubbard III No. 1. Lewis Hubbard, III and Laura Hubbard reserved a one-fifth (1/5) mineral royalty in these three wells. Subsequently, Lewis Hubbard, Jr. assigned a "Working Interest" to A.J. Bradford, whereby A.J. Bradford received a fifty percent (50%) working interest in these gas wells. Also, Doris Hubbard later executed a "Ratification and Quitclaim" of this assignment of working interest over to A.J. Bradford. [6] MCF is the total volume of gas that flows through the meter. Gas volume is reported in thousand cubic feet. [7] The Transfer of Title Clause of the gas purchase contracts states: Upon receipt of said gas by Buyer, title thereto shall pass to and vest in Buyer at the delivery place described herein. The Delivery Place Clause states: The delivery of the gas shall be made at a point mutually agreeable to Buyer and Seller. Sun Limited and Plaintiffs agreed that the delivery place would be at the meter. [8] In September 1992, however, Onshore did request Vinyard and Sons Oil and Gas to open its valves to allow gas to enter the gathering system so that Onshore could test the system for leaks. [9] Oryx Energy signed the gas purchase contracts as the managing general partner for Sun Limited. [10] Eland Energy is not relieved from its obligations under the gas purchase contract with Plaintiffs just because it made an assignment to Onshore. The Assignment Clause of the contract provides, in pertinent part, that: This contract shall extend to and be binding upon the parties hereto, their heirs, administrators, successors and assigns. Moreover, La. C.C. art. 1821 provides, in pertinent part: An obligor and a third person may agree to an assumption by the latter of an obligation of the former. The obligee's consent to the agreement does not effect a release of the obligor. [11] The expert for Eland Energy also made deductions for the interest of the mineral lessors and severance taxes, whereas, Plaintiffs' expert did not. [12] The judgment also included an award of $11 for reimbursement of a January 1992 transportation expense charged by Onshore. The judgment was awarded with legal interest from the date of judicial demand until paid and for all costs of the proceedings, including expert witness fees. [13] The judgment also included an award of $921 for reimbursement of a January 1992 transportation expense charged by Onshore. The judgment was awarded with legal interest from the date of judicial demand until paid and for all costs of the proceedings, including expert witness fees. [14] Moreover, if the gas wells were unprofitable, then surely Eland Energy would have done the research to note this fact when it purchased the wells from Sun Limited; and, yet, nothing in the record indicates that anything was mentioned between Sun Limited and Eland Energy that the wells were unprofitable. [15] The mineral lease in Frey, supra, is similar to the mineral lease in the case sub judice, including the provision covering the "amount realized." [16] Part of this decision was superseded by statute on other grounds. [17] La. R.S. 13:4203 provides, Legal interest shall attach from date of judicial demand, on all judgments, sounding in damages, "ex delicto," which may be rendered by any of the courts.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1723627/	917 S.W.2d 506 (1996) Geoffrey YOUNG, Appellant, v. Travis WARD, Appellee. No. 10-95-001-CV. Court of Appeals of Texas, Waco. March 6, 1996. William B. Short, Jr., Mark Frels, Short, How, Lozano, Frels & Tredoux, L.L.P., Dallas, for appellant. Frederick M. Loeber, Jr., Dallas, for appellee. Before CUMMINGS and VANCE, JJ. OPINION CUMMINGS, Justice. This is a breach of contract case. At trial, appellant Geoffrey Young sought to enforce an oral contract between him and appellee Travis Ward whereby Ward, Young's former employer, had allegedly agreed to pay Young a pension of $2000 per month for the rest of 507 Young's life. Ward moved for summary judgment on the grounds that the alleged oral contract was unenforceable under the statute of frauds. TEX.BUS. & COMM.CODE ANN. § 26.01 (Vernon 1987). The trial court granted the motion, prompting Young to bring this appeal. We reverse and remand. The two parties differ widely in their versions of the events which led to this lawsuit. According to Young, beginning in 1956 and continuing until the end of October 1985, Young worked for Ward as an office manager and bookkeeper. Starting in or about 1969, he began to feel concerned that Ward had not yet established some provision for his retirement income. He, therefore, brought the subject up to Ward, who assured Young that he had no need to be concerned about a lack of a retirement income and that Ward would provide one for Young when the time came. Nevertheless, despite repeated protests from Young, Ward never attempted to finalize a formal agreement with Young until either late September or early October of 1985 when Young was only a few weeks from his last day of employment. At that time, again according to Young, Ward offered to pay Young $2000 per month for the rest of Young's life. Young argues that the consideration for the agreement was that Young would continue to work for Ward until the end of October. The negotiations were oral and the agreement was never reduced to writing. Ward agrees that Young worked for him from 1956 until the end of October 1985 as an office manager and bookkeeper, but this essentially is where the similarity between his story and Young's ends. According to Ward, his decision to offer Young a pension arose from an effort to keep Young in his employment when Ward was relocating his offices from Corsicana to Dallas sometime between 1971 and 1973, not from concerns expressed by Young about a lack of a retirement plan. Young did not want to move to Dallas and was reluctant to commute; accordingly, in an effort to persuade him to continue in his employment, Ward offered to provide Young a company car and gas so that Young could make the commute from Corsicana without any financial expense. Furthermore, as an added incentive, Ward decided to offer Young a retirement plan. Ward consulted an insurance agent, Gara Stark, who analyzed certain figures and offered certain suggestions to Ward on what might be feasible options for him and Young. Ward decided not to accept any of the suggestions from Stark; instead, he orally offered to pay Young $2000 per month for eight years once Young retired. According to Ward, Young orally accepted this offer in 1973, but it was never reduced to writing. The parties agree that Young retired at the end of October 1985 and that Ward paid Young $2000 per month for eight years following Young's retirement. Young brought his lawsuit when Ward informed him in or about October 1993 that he would cease making payments to Young the following month. In his motion for summary judgment, Ward contended the oral agreement between him and Young was unenforceable because it was not to be performed within one year from the date of the making of the agreement, as provided in our state's statute of frauds. TEX.BUS. & COMM.CODE ANN. § 26.01(b)(6). Ward raised two arguments in support of his theory: first, he contended that any contract for lifetime is, per se, barred by the statute of frauds; second, he argued that, since the date of the contract's making was in 1973, more than one year would necessarily have had to elapse before the contract could be performed because Young was not due to retire until twelve years later in 1985. The trial court granted summary judgment solely on the former argument; consequently, we can only consider it and not the latter. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (1993); McDuff v. Chambers, 895 S.W.2d 492, 497 (Tex.App.Waco 1995, writ denied). On appeal from the granting of summary judgment, we must determine whether the evidence establishes as a matter of law that there is no genuine issue of material fact. Rodriguez v. Naylor, 763 S.W.2d 411, 413 (Tex.1989); Hamlin v. Gutermuth, 909 S.W.2d 114, 116 (Tex.App. Houston [14th Dist.] 1995, writ denied). In deciding whether a genuine issue of material fact exists, the evidence must be viewed in 508 favor of the nonmovant, resolving all doubts and indulging all inferences in his favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985). A defendant as a movant must either: 1) disprove at least one element of each of the plaintiff's theories of recovery; or 2) plead and conclusively establish each essential element of an affirmative defense. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 679 (Tex. 1979). Ward in his summary judgment motion raised the affirmative defense of the statute of frauds. The question before us, then, is whether oral lifetime contracts are unenforceable under the statute of frauds. We conclude that they are not. Construing the facts in the light most favorable to Young, we find that in late September or early October 1985 Ward offered to pay Young $2000 per month for the rest of Young's life if Young would continue to work for Ward until the end of October 1985. Young accepted the offer, but the agreement was never reduced to writing. Section 26.01(b)(6) of the Business and Commerce Code provides that, to be enforceable, promises or agreements "which [are] not to be performed within one year from the date of making the agreement" must be in writing. TEX.BUS. & COMM.CODE ANN. § 26.01(b)(6). Agreements which demand performance at or for a specified amount of time are easily determined by the court to fall or not fall under the strictures of section 26.01(b)(6). Bratcher v. Dozier, 162 Tex. 319, 346 S.W.2d 795, 796 (1961) (question of whether an agreement falls within the statute of frauds is one of law). The court simply compares the date of the agreement to the date when the performance under the agreement is to be completed and if there is a year or more in between them then a writing is required to render the agreement enforceable. Gilliam v. Kouchoucos, 161 Tex. 299, 340 S.W.2d 27, 28-29 (1960) (employment contract for ten years within statute); Chevalier v. Lane's, Inc., 147 Tex. 106, 213 S.W.2d 530, 533 (Tex. 1948) (employment contract for term of one year and several weeks within statute); Paschall v. Anderson, 127 Tex. 251, 91 S.W.2d 1050, 1051 (1936) (same); Shaheen v. Motion Indus., Inc., 880 S.W.2d 88, 91 (Tex.App.Corpus Christi 1994, writ denied) (employment contract for nine months not within statute); International Piping Sys., Ltd. v. M.M. White & Assoc., Inc., 831 S.W.2d 444, 451 (Tex.App. Houston [14th Dist.] 1992, writ denied) (employment contract for one year performable within one year and therefore not within statute); Wiley v. Bertelsen, 770 S.W.2d 878, 881-82 (Tex.App.Texarkana 1989, no writ) (employment agreement for approximately ten years within statute); M.R.S. Datascope Inc. v. Exchange Data Corp., Inc., 745 S.W.2d 542, 544 (Tex.App.Houston [1st Dist.] 1988, no writ) (covenant not to compete for three years within statute); Levine v. Loma Corp., 661 S.W.2d 779, 781-82 (Tex. App.Fort Worth 1983, no writ) (agreement to employ employee for over one year and then pay him $1000 per month for life thereafter within statute). Agreements where the time at or for performance is not specifically provided but can be readily ascertained from the context of the agreement can also be easily determined to be within or outside section 26.01(b)(6). Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483 (Tex.1991) (employment contract until retirement, which was eight to ten years from date of agreement's making, was within statute); Niday v. Niday, 643 S.W.2d 919, 920 (Tex.1982) (agreement fell within statute where performance under agreement would take at least two years); Hall v. Hall, 158 Tex. 95, 308 S.W.2d 12, 15 (1957) (employment contract with no specified duration was within statute where the parties intended it to last for a reasonable time and where the jury determined the parties at the time the agreement was made intended it to be about three years); Leon Ltd. v. Albuquerque Commons Partnership, 862 S.W.2d 693, 702 (Tex.App.El Paso 1993, no writ) (writing was required where performance under agency agreement, although for an unspecified term, could not possibly be completed within three years from date of agreement); Winograd v. Willis, 789 S.W.2d 307, 310-11 (Tex.App.Houston [14th Dist.1990, writ denied) (employment contract of unspecified duration determined to be for one year and therefore not within statute where the terms of the agreement indicated that employee 509 was to receive an annual salary); Benoit v. Polysar Gulf Coast, Inc., 728 S.W.2d 403, 406-07 (Tex.App.Beaumont 1987, writ ref'd n.r.e.) (employment contract until retirement for employee several years younger than retirement age within statute); Gano v. Jamail, 678 S.W.2d 152, 154 (Tex.App.Houston [14th Dist.] 1984, no writ) (indefinite duration agreement between plaintiff lawyers to share profits from personal injury cases required a writing because the work on the cases could not reasonably be completed within one year from the date the cases were taken); Molder v. Southwestern Bell Tel. Co., 665 S.W.2d 175, 177 (Tex.App.Houston [1st Dist.] 1983, writ ref'd n.r.e.) (employment contract until retirement for eighteen year-old employee within statute). Agreements which fail to specify a definite time when performance is to be completed and agreements from which the time at or for performance cannot be readily ascertained present a different and more difficult problem. Without knowing definitely when performance is to be completed, courts are unable to determine with certainty whether the agreement was "to be performed within one year from the date of making the agreement." TEX.BUS. & COMM. CODE ANN. § 26.01(b)(6). Texas courts, however, apparently in an effort to avoid the harsh consequences section 26.01(b)(6) can produce, have generally held that, in the absence of a known date when performance will be completed, the statute of frauds does not apply if performance could conceivably be completed within one year of the agreement's making. Miller v. Riata Cadillac Co., 517 S.W.2d 773, 776 (Tex.1974) (where contract to pay employee a bonus after approximately one year could theoretically be performed before the year expired, statute of frauds did not apply); Young v. Fontenot, 888 S.W.2d 238, 241 (Tex. App.El Paso 1994, writ denied) (agreement to transfer stocks at an unspecified date in the future was performable within one year and therefore not within statute); Gerstacker v. Blum Consulting Engineers, Inc., 884 S.W.2d 845, 851 (Tex.App.Dallas 1994, writ denied) (employment contract for no specified duration but for as long as the employee's performance was satisfactory could be performed within one year because performance could conceivably become unsatisfactory within one year); Prowse v. Schellhase, 838 S.W.2d 787, 790 (Tex.App.Corpus Christi 1992, no writ) (agreement to find a buyer for mineral leases was performable within one year and therefore not within statute); Goodyear Tire & Rubber Co. v. Portilla, 836 S.W.2d 664, 670-71 (Tex.App. Corpus Christi 1992) (employment contract for as long as employee performed work satisfactorily not within statute), aff'd, 879 S.W.2d 47 (Tex.1994); Day & Zimmermann, Inc. v. Hatridge, 831 S.W.2d 65, 68-69 (Tex. App.Texarkana 1992, writ denied) (same); Kennedy v. Hyde, 666 S.W.2d 325, 328 (Tex. App.Fort Worth) (oral agreement to repay a note for a ten-year period not within statute because parties intended for alternative performance by possible early payment within one year of the agreement), rev'd on other grounds, 682 S.W.2d 525 (Tex.1984); John D. Calamari and Joseph M. Perillo, Contracts, § 19-18 (2nd ed. 1977); contra Wal-Mart Stores, Inc. v. Coward, 829 S.W.2d 340, 342-43 (Tex.App.Beaumont 1992, writ denied) (employment contract for as long as employee wanted it and made a "good hand" required a writing). Furthermore, under similar reasoning, agreements requiring performance for an indefinite duration and which do not depend upon any conditions for their perpetuation are generally held not to require a writing under the statute of frauds because "there is nothing in the agreement itself to show that [the agreement could not] be performed within a year according to its tenor and the understanding of the parties[.]" Bratcher, 346 S.W.2d at 796 (quoting 49 Am.Jur. Statute of Frauds § 27 (1943)). Again, the agreements could conceivably be performed within a year of their making; therefore, a writing is not required to enforce them. Id. (statute of frauds did not apply to employment contract of indefinite duration); Beckstrom v. Gilmore, 886 S.W.2d 845, 846-47 (Tex.App.Eastland 1994, writ denied) (agreement of indefinite duration by attorney to send demand letters for medical doctor performable within one year and therefore not within statute); Morgan v. Jack Brown Cleaners, Inc., 764 S.W.2d 825, 827 (Tex. 510 App.Austin 1989, writ denied) (on rehearing) (employment contract of indefinite duration not within statute); Kelley v. Apache Products, Inc., 709 S.W.2d 772, 774 (Tex. App.Beaumont 1986, writ ref'd n.r.e.) (same); Robertson v. Pohorelsky, 583 S.W.2d 956, 958 (Tex.Civ.App.Waco 1979, writ ref'd n.r.e.) (employment contract of indefinite duration did not require writing because nothing in agreement indicated parties intended employee to work more than one year); Restatement (Second) of Contracts § 130 cmt. a (1981). Accordingly, agreements to last during the lifetime of one of the parties would also not require a writing because the party upon whose life the duration of the contract is measured could die within a year of the agreement's making. In Wright v. Donaubauer, 137 Tex. 473, 154 S.W.2d 637 (1941), the Supreme Court considered whether an oral agreement providing for an alternative means of performing on a ten-year note was within the statute of frauds. The parties orally agreed that the debtor could pay off his $2100 debt, payable on the note by $100 every six months for ten years, by performing yard work either for the life of the creditor or for the duration of the note, whichever should occur first. Id. at 638. The parties intended that the note, under either scenario, would be paid in full. See id. It is important to distinguish the two agreements at issue in the Wright case. The first is the written agreement represented in the ten-year note. The second is the oral agreement between the parties providing for an alternative means of paying off the note other than the tendering of $100 every six months for ten years. Under the oral agreement, the parties intended for two alternative means of performance. The first required ten years of yard work by the debtor; the second required the performance of yard work by the debtor until the death of the creditor. The Supreme Court held that, because the second means of performance could have occurred within one year of the agreement's making, the statute of frauds did not apply and a writing was not required to enforce it. Id. at 639; see Gilliam, 340 S.W.2d at 28. This rule of law has since been followed in Texas and in virtually every other jurisdiction in the United States. Lieber v. Mercantile Nat'l. Bank at Dallas, 331 S.W.2d 463, 474 (Tex.Civ.App.Dallas 1960, writ ref'd. n.r.e.) (oral prenuptial agreement that husband would will certain monies to his wife not within statute because husband could have died within one year of the agreement's making); Central Nat'l. Bank of San Angelo v. Cox, 96 S.W.2d 746, 748 (Tex.Civ.App.Austin 1936, writ dism'd) (employment contract until employee should die or become incapacitated performable within one year and therefore not within statute); accord Doherty v. Doherty Ins. Agency, Inc., 878 F.2d 546, 551-52 (1st Cir.1989) (applying Massachusetts law); Rath v. Selection Research, Inc., 246 Neb. 340, 519 N.W.2d 503, 506 (1994); Boothby v. Texon, Inc., 414 Mass. 468, 608 N.E.2d 1028, 1035-36 (1993); Falls v. Virginia State Bar, 240 Va. 416, 397 S.E.2d 671, 672 (1990); Kestenbaum v. Pennzoil Co., 108 N.M. 20, 766 P.2d 280, 283-84 (1988), cert. denied, 490 U.S. 1109, 109 S.Ct. 3163, 104 L.Ed.2d 1026 (1989); Bergquist-Walker Real Estate, Inc. v. William Clairmont, Inc., 333 N.W.2d 414, 418 (N.D.1983); Kitsos v. Mobile Gas Serv. Corp., 404 So.2d 40, 42 (Ala. 1981); Kiyose v. Trustees of Indiana Univ., 166 Ind.App. 34, 333 N.E.2d 886, 889 (1975); Price v. Mercury Supply Co., Inc., 682 S.W.2d 924, 933 (Tenn.App.1984); contra Massey v. Houston Baptist Univ., 902 S.W.2d 81, 84 (Tex.App.Houston [1st Dist.] 1995, writ denied) (promise of lifetime employment, without reference to retirement, required a writing); Benoit, 728 S.W.2d at 407 (employment contracts for "lifetime employment" require a writing); Zimmerman v. H.E. Butt Grocery Co., 932 F.2d 469, 472-73 (5th Cir.) (under Texas law agreements for "lifetime employment" require a writing), cert. denied, 502 U.S. 984, 112 S.Ct. 591, 116 L.Ed.2d 615 (1991); Quinn v. Workforce 2000, Inc., 887 F.Supp. 131, 136 (E.D.Tex. 1995) (same); Rayburn v. Equitable Life Assurance Soc. of the United States, 805 F.Supp. 1401, 1405-06 (S.D.Tex.1992) (same). However, the mere possibility of the agreement terminating within one year of its making does not, in and of itself, ensure that a writing is not required. If this conceivable possibility of performance is dependent upon 511 some merely fortuitous event, a writing will still be required to enforce the agreement. Gilliam, 340 S.W.2d at 28 (ten-year employment contract required writing notwithstanding express provision in the oral agreement that such would terminate upon employee's death); Chevalier, 213 S.W.2d at 533 (mere possibility of death did not eliminate requirement of a writing to enforce an employment contract of one year and several weeks); Collins v. Allied Pharmacy Management, Inc., 871 S.W.2d 929, 934 (Tex.App.Houston [14th Dist.] 1994, no writ) (employment contract for three years within statute even though under agreement employee could be terminated at any time for cause); Mann v. NCNB Texas Nat'l Bank, 854 S.W.2d 664, 668 (Tex.App.Dallas 1992, no writ) (loan agreement with a three-year repayment term was within statute notwithstanding remote possibility that debtor would repay the loan within a year from its making); Webber v. M.W. Kellogg Co., 720 S.W.2d 124, 128 (Tex. App.Houston [14th Dist.] 1986, writ ref'd. n.r.e.) (employment contract until retirement required a writing notwithstanding employer's contractual right to discharge employee at will within first three months of employment). This seemingly technical distinction is one between termination of the contract and performance under the contract. Gilliam, 340 S.W.2d at 28-9; Chevalier, 213 S.W.2d at 532. Section 26.01(b)(6) refers to agreements which cannot be "performed" within one year of their making. TEX.BUS. & COMM.CODE ANN. § 26.01(b)(6). Accordingly, if an agreement could be fully "performed" within one year of its making, section 26.01(b)(6) does not apply. Bratcher, 346 S.W.2d at 796; Gilliam, 340 S.W.2d at 28-9; Chevalier, 213 S.W.2d at 532; Gerstacker, 884 S.W.2d at 851 (employment contract for as long as the employee's performance was satisfactory would be fully completed when employee's performance became unsatisfactory); Portilla, 836 S.W.2d at 670-71 (same). But if the occurrence of some other contingent event, even if expressly contemplated in the agreement, would simply terminate the agreement before the agreement had been fully performed, then the possibility of that terminating event occurring within one year of the agreement's making is insufficient to take the agreement outside of section 26.01(b)(6). The event that could conceivably occur within one year of the agreement must be one intended by the parties to result in the full performance of the agreement. In the words of the Fifth Circuit, "If an oral ... agreement can cease upon some contingency, other than by some fortuitous event or the death of one of the parties, the agreement may be performed within one year, and the statute of frauds does not apply." Pruitt v. Levi Strauss & Co., 932 F.2d 458, 463-64 (5th Cir.1991); see Gilliam, 340 S.W.2d at 29-30; Chevalier, 213 S.W.2d at 532; Collins, 871 S.W.2d at 934; M.R.S. Datascope, 745 S.W.2d at 544. We will now apply the facts to the above-stated principles of law. Here, the summary judgment evidence indicates that the parties agreed in late September or early October 1985 that Ward would pay Young $2000 per month for the rest of Young's life if Young would work for Ward until the end of October 1985. We note that there are two stages of performance under this agreement. The first is the month and a half of work Young would have to complete in order to be entitled to payment from Ward. The parties identified a specific and definite period of time by which performance under this first stage would be completed; i.e., no more than a month and a half. This month and a half would necessarily expire within one year of the agreement's making; therefore, the writing requirement of section 26.01(b)(6) is not invoked by this stage. The second stage of performance is the period of time Ward was required to make payments to Young. This period was one of an indefinite duration; i.e., until Young dies. As an agreement of indefinite duration, we must ask whether it could have been fully performed within one year of its making. Obviously, it could have been. Young could have died at any time after he ceased working for Ward. We must also ask, however, whether Young's death would have resulted in the agreement being fully performed or fortuitously terminated. The language of the 512 agreement reveals the parties' intention that the contract would be fully performed once Young died, assuming he successfully performed under the first stage of the agreement, which we note was less than one year. Young's death within a year of the agreement's making would not have simply resulted in the fortuitous termination of the agreement: Young's death was intended by the parties to be the defining event which would determine when the agreement was fully performed. Therefore, because both stages of the agreement, taken together, could have been fully performed within one year of the agreement's making, we conclude that section 26.01(b)(6) is not applicable. We, accordingly, sustain Young's first point of error. Due to our disposition of his first point of error, we need not consider his remaining points. The cause is reversed and remanded for a trial on the merits.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1805825/	744 So.2d 736 (1999) Dennis ADAMS and Rita Adams v. U.S. HOMECRAFTERS, INC. No. 98-CA-00368-SCT. Supreme Court of Mississippi. June 3, 1999. Rehearing Denied September 2, 1999. 737 Robert H. Tyler, Biloxi, Attorney for Appellants. James B. Galloway, Jackson, Attorney for Appellee. BEFORE SULLIVAN, P.J., BANKS AND WALLER, JJ. SULLIVAN, Presiding Justice, for the Court: ¶ 1. U.S. Homecrafters, Inc. entered into a contract with Dennis and Rita Adams on April 19, 1991, to build the couple a house on their previously purchased property for $53,048.25. Construction began in late June or early July of 1991. Even before construction was completed, Mr. Adams noticed that whenever it rained, the front porch area of the house would flood. The couple moved into the home after completion of construction, in early August of 1991. Six to eight months after they moved in, Mr. Adams realized that the flooding problem still existed. He dug trenches and placed cement pilings in front of the house in an attempt to divert water around the house and prevent it from entering their home. After each rain, Mr. Adams had to dig out the ditches again. However, approximately three inches of water continued to accumulate on the front porch whenever there was a significant rain, causing the railing across the front porch to rot and fall down. The water came within a quarter of an inch of getting inside the front door. ¶ 2. Mr. Adams stated that both he and his wife contacted U.S. Homecrafters for eighteen months about the problem with no response. The Adamses finally hired an attorney. Once the Adamses' attorney contacted U.S. Homecrafters, Terry Loveless, a former officer for U.S. Homecrafters, offered to attempt to repair the drainage problem by cutting contoured ditches on the site and placing landscape timbers to prevent erosion, but Mr. Adams refused to allow him access to their property. Pamela Loveless, Terry Loveless's wife and a former sales agent for U.S. Homecrafters, similarly testified that she proposed two solutions to Mrs. Adams to correct the drainage problem-use of landscape timbers or drainage ditches. ¶ 3. The Adamses filed suit against U.S. Homecrafters in the Circuit Court of Harrison County on January 28, 1994, seeking monetary damages for property damage and emotional distress due to the builder's breach of warranty. At trial, the Adamses' civil engineer expert, William Tully Rhodes, testified that U.S. Homecrafters had constructed the Adamses' home on a downhill slope "at grade," meaning that it was built at or near the ground surface, causing collection of water on the front porch. In Mr. Rhodes's opinion, building the house at grade was a violation of the builder's duty to exercise reasonable care. ¶ 4. Mr. Rhodes testified that the builder could have used a chain wall foundation during construction, added fill to raise the slab foundation, or graded or contoured 738 the site to control storm water flow and prevent flooding of the front porch area. Mr. Loveless stated that he, rather than the Adamses, made the final decision to use a slab foundation rather than a chain wall. Mr. Rhodes saw no signs of contouring of the yard when he investigated the site in May of 1993, but Mr. Adams testified that at one point during construction he saw a bulldozer on the site scraping dirt away from the house. Mr. Rhodes stated that, even with contouring, the potential for soil erosion or silting would remain if no maintenance or landscaping were conducted. ¶ 5. Mr. Rhodes offered two proposals for correcting the drainage problem on the Adamses' home site, one costing $7,731, and the other costing $6,341. He also stated that Mr. Adams's attempts to alleviate the problem by digging trenches was reasonable under the circumstances. However, he did not recommend the use of trenches or ditches as a permanent solution from either a safety or an aesthetics standpoint. Mr. Rhodes's opinion was that landscape timbers would not have been an effective means of preventing the runoff from accumulating on the front porch. ¶ 6. Mr. Loveless testified that fill was in fact put underneath the slab foundation of the house at the beginning of construction, leaving it approximately two to three inches above grade. He also confirmed that the bulldozer Mr. Adams saw at the end of construction was contouring the site to divert water away from the front of the house. Mr. Loveless agreed that he "guessed" Mr. Adams's efforts were a reasonable means of attempting to prevent water from entering the couple's home. However, Mr. Loveless asserted that the flooding on the front porch was caused by the Adamses' failure to maintain the contour in the yard. He testified that the Adamses were responsible for seeding the yard to prevent runoff, because landscaping was not covered under the construction contract. He assumed that the Adamses knew that it was their responsibility, because "it's kind of common sense ..." Mr. Adams, on the other hand, testified that U.S. Homecrafters never warned them about a potential drainage problem or the need for landscaping. Mrs. Adams corroborated this testimony. ¶ 7. The jury found in favor of the Adamses and awarded them damages in the amount of $6,731. Judge Terry entered judgment in favor of the Adamses in the amount of $6,731 on September 11, 1997. The Adamses appeal to this Court, assigning as error the trial court's denial of an instruction on damages for the reasonable value of Mr. Adams's labor in mitigating loss and for emotional distress. STATEMENT OF THE LAW I. WAS THE JURY PROPERLY INSTRUCTED ON HOW TO ASSESS DAMAGES FLOWING FORM THE CONSTRUCTION AND SALE OF A NEGLIGENTLY BUILT RESIDENCE? ¶ 8. At the close of all testimony, the Adamses offered Jury Instruction P-4 on the elements of damages. Element two of the instruction allowed the jury to award the Adamses damages for the reasonable value of their efforts in preventing further damage to their house, and element three allowed the jury to award damages for mental anguish. U.S. Homecrafters objected to elements two and three, and after hearing arguments from counsel, Judge Terry agreed to grant the instruction after removing those two elements. A. REASONABLE VALUE OF MITIGATION EFFORTS ¶ 9. The Adamses assert that the trial court erred in failing to instruct the jury on damages for the reasonable value of Mr. Adams's efforts in mitigating damages by digging and maintaining the ditches around their house. "[W]hile generally an injured person has the duty to use 739 reasonable care, and to make reasonable effort to prevent or minimize the consequences of the wrong or injury, the rule is one of reason and that, where funds are necessary to meet the situation and the injured person is without the funds, he is excused from the effort." Tri-State Transit Co. v. Martin, 181 Miss. 388, 396, 179 So. 349, 350 (1938) (citing North Am. Acc. Ins. Co. v. Henderson, 180 Miss. 395, 404, 177 So. 528, 530 (1937)). "`As a general rule, a party is entitled to all legitimate expenses that he may show to have been incurred by him in an honest endeavor to reduce the damages flowing from or following the wrongful act.'" Vining v. Smith, 213 Miss. 850, 862, 58 So.2d 34, 38 (1952) (quoting 25 C.J.S. Damages § 49). "We agree with the general rule that a landowner can recover reasonable and necessary expenses incurred in an attempt to prevent future damages, so long as those expenses do not exceed the diminution in value the property would suffer if the preventive measures are not undertaken." City of Jackson v. Keane, 502 So.2d 1185, 1188 (Miss.1987) (emphasis in original). ¶ 10. U.S. Homecrafters maintains that Mississippi case law does not support an award of damages for reasonable value of the plaintiff's own labor toward mitigation of loss. It asserts that Mississippi law on this subject only allows a plaintiff to be reimbursed for reasonable expenses incurred in mitigating loss. We disagree. As Judge Terry pointed out at trial, Mr. Adams should not be punished for doing the work himself rather than hiring someone else to do it just to run up expenses. Had Mr. Adams sat idly by and allowed the runoff water to enter his home, causing even more damage, U.S. Homecrafters no doubt would have insisted on a reduction in the amount of the jury verdict for failure to mitigate. See Hudson v. Farrish Gravel Co., 279 So.2d 630, 634-35 (Miss.1973) (quoting 15 Am.Jur. Damages § 40, at 439 (1938)) ("[I]t is the duty of one whose property is injured or threatened with injury to take reasonable precautions and to make reasonable expenditures to guard against or minimize such injury; and if he fails to do so, he cannot recover damages for any injuries which by the exercise of reasonable care he could have avoided."); Travelers Indem. Co. v. Rawson, 222 So.2d 131, 135 (Miss.1969) (homeowners had duty within a reasonable length of time after original damage to roof to remedy the faulty situation and prevent subsequent damage). It would be unjust to deny Mr. Adams reimbursement for any proven value of his efforts to reduce the drainage problem through digging ditches around his house. ¶ 11. In Sites v. Moore, 79 Ohio App.3d 694, 607 N.E.2d 1114, 1116 & 1119-20 (1992), the Fourth District Court of Appeals of Ohio upheld an award for damages against the appellant contractor found to have breached a contract to remodel the appellees' house, including $9,821.86 to reimburse the appellees for their own labor and materials. In so holding, the Court stated: In the case of a construction contract breached by the contractor, the proper measure of damages is "the reasonable cost of placing the building in the condition contemplated by the parties at the time they entered into the contract."... This logically includes the reasonable value of their own services employed as a substitute for appellant in his absence and breach of contract. Had appellant not left the job with the majority of the contract monies, appellees could have hired other contractors to complete the work they did themselves.... Given the circumstances and the condition of appellees' house, they exercised the only means available to remedy appellant's breach and mitigate their damages. Appellant must not be permitted to profit from appellees' completion of the very labor he contracted to complete. If we denied appellees the value of their services, they would not be receiving that for 740 which they contracted or its equivalent.... Id. at 1119 (citations omitted) (emphasis added). See also Mississippi Transp. Comm'n v. Dewease, 691 So.2d 1007, 1012 (Miss. 1997) (wife performing nursing care for her husband rather than hiring professional nurses may be reimbursed under worker's compensation law). A plaintiff who performs mitigating repairs himself should be able to recover damages for the reasonable value of that time and labor just as he would be able to recover the cost of paying someone else to perform the task. ¶ 12. U.S. Homecrafters also asserts that the Adamses presented no evidence to prove that Mr. Adams's efforts actually mitigated their loss. However, "[t]he injured party is not precluded from recovery ... to the extent that he has made reasonable but unsuccessful efforts to avoid loss." West Haven Sound Dev. Corp. v. City of West Haven, 201 Conn. 305, 514 A.2d 734, 748 (1986) (quoting Restatement (Second) of Contracts § 350(2) and cmt. h; § 347 cmt. c). Both Mr. Rhodes and Mr. Loveless agreed that Mr. Adams's efforts in digging trenches around his house were reasonable under the circumstances to prevent further damage. U.S. Homecrafters's argument on this point is therefore without merit. ¶ 13. However, the plaintiff still carries the burden of proving the amount of any damages with reasonable certainty: Whatever the measure of damages, they may be recovered only where and to the extent that the evidence removes their quantum from the realm of speculation and conjecture and transports it through the twilight zone and into the daylight of reasonable certainty....This principle is of importance today, as we remember that a measure of speculation and conjecture attends even damage proof all would agree reasonably certain. Wall v. Swilley, 562 So.2d 1252, 1256 (Miss.1990) (citations omitted). On the other hand, [T]he plaintiff should not be deprived of its right to recover because of its inability to prove with absolute certainty the extent of the loss or the exact amount of money unjustly and illegally collected, and the law does not require such absolute accuracy of proof.... "The rule that damages, if uncertain, cannot be recovered, applies to their nature, and not to their extent. If the damage is certain, the fact that its extent is uncertain does not prevent a recovery." Billups Petroleum Co. v. Hardin's Bakeries Corp., 217 Miss. 24, 37, 63 So.2d 543, 548 (1953) (quoting Linen Thread Co. v. Shaw, 9 F.2d 17, 19 (1st Cir.1925)) (citations omitted). See also Finkelberg v. Luckett, 608 So.2d 1214, 1222 n. 4 (Miss. 1992) (quoting 25 C.J.S. Damages § 28) ("The rule as to the recovery of uncertain damages generally has been directed against uncertainty as to the fact or cause of damage rather than uncertainty as to the measure or extent."); Mississippi Power & Light Co. v. Pitts, 181 Miss. 344, 361, 179 So. 363, 366 (1938) (quoting Montgomery Ward & Co. v. Hutchinson, 173 Miss. 701, 707, 159 So. 862, 863 (1935)) ("A party who has broken his contract cannot escape liability because of the difficulty in finding a perfect measure of damages. It is enough that the evidence furnishes sufficient data for an approximate estimate of the amount of the damages."); Hawkins Hardware Co. v. Crews, 176 Miss. 434, 441, 169 So. 767, 769 (1936) ("When the cause of the damages is reasonably certain, recovery is not to be denied because the data in proof does not furnish a perfect measure thereof...."); Shell Petroleum Corp. v. Yandell, 172 Miss. 55, 67, 158 So. 787, 790 (1935) ("The damages are speculative when the cause is uncertain, not when the amount is uncertain."). ¶ 14. The Adamses' position is that Mr. Adams's testimony regarding the amount of time he spent on his efforts, 741 combined with the testimony of Mr. Rhodes and Mr. Loveless that his attempts to mitigate damages were reasonable and appropriate under the circumstances, was sufficient evidence to support an award of damages for cost of mitigation. However, we agree with Judge Terry and U.S. Homecrafters that the Adamses failed to present sufficient proof of the value of Mr. Adams's time. Even if we were to accept the Adamses' argument that Mr. Adams should receive only minimum wage for his efforts, there were three levels of minimum wage during the five-year period during which Mr. Adams dug the ditches. See 29 U.S.C.A. § 206(a)(1) (1998). The jury also had insufficient evidence before it to calculate the amount of time he spent digging the ditches. ¶ 15. In the cases cited by the Adamses, supra, there was more of a factual basis to establish the amount of damages. Billups, 217 Miss. at 30-31, 63 So.2d at 545 (testimony of expert accountant based upon closely monitored test period and cost analysis of café operation sufficiently established amount of overcharge by bakery for bread delivered to café); Finkelberg, 608 So.2d at 1222 (uncontradicted competent proof of specific amount of legal expenses paid); Pitts, 181 Miss. at 361-62, 179 So. at 366 (profits from previous years was sufficient evidence to prove loss of profits of established ice business); Crews, 176 Miss. at 440-41, 169 So. at 769 (sufficient facts were presented to the jury, including item of $22 in damages to flour, to determine that the amount of damages to store inventory caused by leaking roof was not less than $75); Yandell, 172 Miss. at 66, 158 So. at 790 (average of recorded gasoline sales from preceding months was sufficient evidence to establish damages for loss of commission due to breach of contract). See also Wall, 562 So.2d at 1256-58 (criticized poor proof of damages to home buyers caused by foundation problem, because no evidence was presented as to actual value of home or cost of repairs at time of purchase). But see Sites, 607 N.E.2d at 1119 (allowed recovery for appellees' own labor despite lack of records of time spent, because appellees testified that they actually spent more time than that for which they sought damages, and charged only 40% of what appellant would have charged for the labor). The most specific testimony Mr. Adams gave as to the amount of time he spent digging out the ditches was that over the last five years he dug out the ditches "[a]t least 200 or more times" taking "[s]ometimes 30 minutes, sometimes an hour" depending on how much dirt had accumulated. Had the Adamses presented the trial court with more of a factual basis for the jury to determine the cost of mitigation without relying on pure speculation, Mr. Adams would be entitled to recovery for his efforts. However, the Adamses failed to present sufficient evidence of the reasonable value of Mr. Adams's mitigation efforts. As a result, we find that Judge Terry properly refused to grant element two of Instruction P-4 on damages. B. EMOTIONAL DISTRESS DAMAGES ¶ 16. The Adamses also complain about the trial court's failure to instruct the jury on damages arising from mental and emotional distress. They claim that under Mississippi law, there is no requirement for proving physical impact or physical manifestation in order to receive damages for emotional distress. ¶ 17. The Adamses and U.S. Homecrafters agree that this is a case of simple negligence and not intentional conduct. The question, then, is whether Mississippi law does in fact require proof of physical manifestation in order to recover damages for emotional distress caused by simple negligence rather than an intentional tort. As we stated in Finkelberg, 608 So.2d at 1221, the "seminal case" governing claims for emotional distress not accompanied by physical injury is Sears, Roebuck & Co. v. Devers, 405 So.2d 898 (Miss.1981). Therein, we cited several of our previous cases, 742 reiterating the rule that a party may not recover damages for mental anguish "unaccompanied by physical or bodily harm" without evidence of "willful, wanton, malicious or intentional wrong ..." Devers, 405 So.2d at 902 (quoting Daniels v. Adkins Protective Serv., Inc., 247 So.2d 710, 711 (Miss.1971)). We went on to say that: Where there is something about the defendant's conduct which evokes outrage or revulsion, done intentionally-or even unintentionally yet the results being reasonably foreseeable-Courts can in certain circumstances comfortably assess damages for mental and emotional stress, even though there has been no physical injury. In such instances, it is the nature of the act itself-as opposed to the seriousness of the consequences-which gives impetus to legal redress.... Id. We have repeatedly cited our decision in Devers with approval. See, e.g., Mississippi Valley Gas Co. v. Estate of Walker, 725 So.2d 139, 148-49 (Miss.1998); Wong v. Stripling, 700 So.2d 296, 307 (Miss. 1997); Leaf River Forest Prods., Inc. v. Ferguson, 662 So.2d 648, 658-59 (Miss. 1995); Peoples Bank & Trust Co. v. Cermack, 658 So.2d 1352, 1365-66 (Miss.1995); Morrison v. Means, 680 So.2d 803, 806 (Miss.1996); Finkelberg, 608 So.2d at 1221; Strickland v. Rossini, 589 So.2d 1268, 1275 (Miss.1991); Wirtz v. Switzer, 586 So.2d 775, 784 (Miss.1991). ¶ 18. In cases of simple negligence, as opposed to intentional tort, we have in some cases set out a more stringent standard: If there is outrageous conduct, no injury is required for recovery for intentional infliction of emotional distress or mental anguish.... One who claims emotional distress need only show that the emotional trauma claimed was a reasonably foreseeable consequence of the negligent or intentional act of another.... If the conduct is not malicious, intentional or outrageous, there must be some sort of demonstrative harm, and said harm must have been reasonably foreseeable by the defendant. Smith v. Malouf, 722 So.2d 490, 497-98 (Miss.1998) (citations omitted). Similarly, in Morrison, we held: If [sic] the case of ordinary garden variety negligence, the plaintiff must prove some sort of injury, whether it be physical or mental. See Wirtz v. Switzer, 586 So.2d 775, 784 (Miss.1991); and Devers, 405 So.2d at 902. If the conduct is not malicious, intentional or outrageous, there must be some sort of demonstrative harm, and said harm must have been reasonably foreseeable to the defendant. Strickland v. Rossini, 589 So.2d 1268, 1275 (Miss.1991). Morrison, 680 So.2d at 806. Most recently, in Estate of Walker, we stated, "If there is outrageous conduct, no injury is required for recovery for intentional infliction of emotional distress or mental anguish.... If the conduct is not malicious, intentional or outrageous, there must be some sort of demonstrative harm, and said harm must have been reasonably foreseeable to the defendant." 725 So.2d at 149 (quoting Morrison, 680 So.2d at 806) (citations omitted). ¶ 19. However, another line of cases requires only that a plaintiff prove that the emotional distress in a simple negligence case was a reasonably foreseeable result of the defendant's conduct. The Adamses point to two cases which are a departure from the rule that there must be evidence of a "demonstrative harm" to support an award for emotional distress in a simple negligence case-Universal Life Ins. Co. v. Veasley, 610 So.2d 290 (Miss.1992), and Southwest Miss. Reg'l Med. Ctr. v. Lawrence, 684 So.2d 1257 (Miss.1996). Contrary to U.S. Homecrafters's assertion, these two cases involved "nothing more than simple negligence." Veasley, 610 So.2d at 295; Lawrence, 684 So.2d at 1269. In Veasley, we found that the plaintiffs claim for emotional distress caused by the insurance company's refusal to pay a life insurance claim was supported by her testimony 743 that the company's conduct "... caused her worry, anxiety, insomnia, and depression. Additionally, she experienced difficulty in coping with daily life and children, her grandchildren, in particular." 610 So.2d at 295. In reaching this decision, we stated: Applying the familiar tort law principle that one is liable for the full measure of the reasonably foreseeable consequences of her actions, it is entirely foreseeable by an insurer that the failure to pay a valid claim through the negligence of its employees should cause some adverse result to the one entitled to payment. Some anxiety and emotional distress would ordinarily follow, especially in the area of life insurance where the loss of a loved one is exacerbated by the attendant financial effects of that loss. Additional inconvenience and expense, attorneys fees and the like should be expected in an effort to have the oversight corrected. It is no more than just that the injured party be compensated for these injuries. Id. ¶ 20. We pointed to this language in reaching our decision in Lawrence, finding that evidence of the plaintiff's worry and loss of the family home resulting from denial of self-insured equivalent workers' compensation benefits and employment termination was sufficient to support an award for emotional distress. Lawrence, 684 So.2d at 1269. In so holding, we stated: This Court traditionally held that emotional distress and mental anguish damages are not recoverable in a breach of contract case in the absence of a finding of a separate independent intentional tort.... In recent years this Court has moved away from this requirement. In Strickland v. Rossini, 589 So.2d 1268, 1275 (Miss.1991), we stated: The rule once was that, to recover damages for emotional distress, the plaintiff had to prove either (a) an intentional or at least grossly negligent tort or (b) negligence accompanied by physical impact. The Court has relaxed this rule in a long series of cases.... The upshot of these cases in the present rule is a plaintiff may recover for emotional injury proximately resulting from negligent conduct, provided only that the injury was reasonably foreseeable by the defendant. Id. (citations omitted) (emphasis added). ¶ 21. It is undisputed that under Mississippi law, a plaintiff asserting a claim for mental anguish, whether as a result of simple negligence or an intentional tort, must always prove that the emotional distress was a reasonably foreseeable result of the defendant's conduct. In cases of intentional infliction of emotional distress, where the defendant's conduct was "malicious, intentional or outrageous," the plaintiff need present no further proof of physical injury. Where, as here, the defendant's conduct amounts to simple negligence, we take this opportunity to clarify that we have moved away from the requirement of proving some physical injury in addition to the proof of reasonable foreseeability. Our language in the previously cited cases, adopting the term "demonstrable harm" in place of "physical injury," indicates that the proof may solely consist of evidence of a mental injury without physical manifestation. ¶ 22. In this case, however, the Adamses failed to present sufficient proof of emotional distress to warrant the instruction to the jury. The only evidence presented by the Adamses supporting their claim for emotional distress was the following testimony by Mr. Adams on direct examination: Q. Dennis, how would you describe to this jury how the last five years have been at your house on Krohn Road? A. It's been a total nightmare. I mean, I've stayed up for days and I've stayed up for nights just hoping water 744 wouldn't get in my porch. I have been out there the middle of the nighttime making sure, and I have dug it out in the middle of the nighttime just to keep water out of the house because I just couldn't get no help. Q. What do you do when you're at work and it rains? A. Worry real bad. Sometimes I leave work and go check real quick because I don't work because I don't work butI guess it's about a half a mile from my house. The evidence presented here is similar to that in both Morrison v. Means and Strickland v. Rossini, wherein the plaintiffs complained of worry or emotional upset and loss of sleep. Morrison, 680 So.2d at 807; Strickland, 589 So.2d at 1275-76. We found that this was insufficient evidence to support an award for emotional distress. Id. "[T]wo sentences out of the entire transcript offered in support of this claim are hardly enough evidence to support a verdict ... for mental anguish." Morrison, 680 So.2d at 807. Similarly, in Strickland, the only proof of emotional distress was four sentences of testimony by the plaintiffs boyfriend: She's been very depressed. Her kids have been very upset over all this and emotional. They've gone through a lot of stress and worry over the way their mother has been upset and sick and not able to sleep at night. I've been called to come out there and sit with her [on] occasions at night because of being [sic] so upset, and it's just..[.] it's been a very detrimental thing for her. 589 So.2d at 1275. See also Estate of Walker, 725 So.2d at 149-50. We find that Mr. Adams's vague testimony about loss of sleep and worry caused by the drainage problem was insufficient to support an instruction or award of damages for emotional distress in this case. CONCLUSION ¶ 23. The Adamses failed to present a sufficient factual basis outside of pure speculation for the jury to determine the reasonable value of Mr. Adams's efforts in digging ditches to prevent further damage to their home. They also presented insufficient evidence to support an award for emotional distress. We therefore affirm the trial court's judgment refusing the proffered instruction on those two items of damages in this case. ¶ 24. AFFIRMED. PRATHER, C.J., PITTMAN, P.J., BANKS, McRAE, SMITH, WALLER AND COBB, JJ., CONCUR. MILLS, J., DISSENTS WITH SEPARATE WRITTEN OPINION. MILLS, Justice, dissenting: ¶ 25. The majority states that in the realm of negligent infliction of emotional distress, "... we take this opportunity to clarify that we have moved away from the requirement of proving some physical injury in addition to the proof of reasonable foreseeability." This is in sharp contrast to the language of Smith v. Malouf, 722 So.2d 490 (Miss.1998). In that case we stated: If the conduct is not malicious, intentional, or outrageous, there must be some sort of demonstrative harm, and said harm must have been reasonably foreseeable by the defendant. Id. at 497-98. ¶ 26. I decline to join the expansion of liability espoused by the majority but would instead abide by the precedential language of Smith v. Malouf. Therefore, I must respectfully dissent.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1822334/	262 Wis.2d 747 (2003) 2003 WI 78 664 N.W.2d 607 STATE of Wisconsin, Plaintiff-Respondent, v. Nancy R. LAMON, Defendant-Appellant-Petitioner. No. 00-3403-CR. Supreme Court of Wisconsin. Oral argument February 19, 2003. Decided July 2, 2003. 753 For the defendant-appellant-petitioner there were briefs by Timothy A. Provis, Madison, and oral argument by Timothy A. Provis. For the plaintiff-respondent the cause was argued by Mary E. Burke, assistant attorney general, with whom on the brief was James E. Doyle, attorney general. ¶ 1. N. PATRICK CROOKS, J. Nancy R. Lamon (Lamon) seeks review of a court of appeals' decision that 754 affirmed the circuit court's finding that the State's peremptory strike of a potential juror was not in violation of the test established under Batson v. Kentucky, 476 U.S. 79, 96-98 (1986). ¶ 2. We affirm the decision of the court of appeals. We give deference to the circuit court's decision based on the standard set forth in Hernandez, and hold that clearly erroneous is the correct standard of review in this case. Hernandez v. New York, 500 U.S. 352, 364 (1991). We hold that the decision of the circuit court was not clearly erroneous under Batson, because the State offered sufficient evidence for its race-neutral justification. I. BACKGROUND ¶ 3. The facts are undisputed. Leeman Jones (Jones), an African-American, was driving home around 1:00 or 1:30 a.m. on May 31, 1998, when Nancy R. Lamon (Lamon) flagged him down. She expressed the need to be taken to a telephone and got into Jones' car. Jones began driving, but stopped the car upon Lamon's statement that her friend was in a car behind them. Jones stopped the car and the person in that car approached Jones' window and asked for Jones' wallet while Lamon threatened Jones with an object on his right side. Jones complied and his money was taken from his wallet. Lamon exited Jones' car and entered her friend's car. ¶ 4. On June 3, 1998, a complaint was filed in Rock County Circuit Court charging Lamon with violating Wis. Stat. § 943.32(1)(b) & (2)[1] (armed robbery by threat of force with article reasonably believed to be 755 a dangerous weapon). The complaint also alleged Lamon was a repeater as defined in Wis. Stat. § 939.62(1)(c). ¶ 5. On June 30, 1998, Lamon entered a plea of not guilty. Lamon then entered a motion to dismiss, claiming lack of probable cause at the preliminary hearing. The circuit court denied the motion finding that there was sufficient evidence for Jones to have had a reasonable belief that he was threatened by a weapon. ¶ 6. On April 14, 1999, jury selection for Lamon's trial began. Twenty out of 35 possible jurors were called and seated in the jury box; one of which was Mr. Dondre Bell (Bell). Bell was the only African-American in the jury pool. The circuit court questioned the venire first. Bell did not respond affirmatively to any of these questions, although others did answer yes and were asked follow-up questions. ¶ 7. The court asked the potential jurors the following questions: Is anyone related by blood or marriage to Lamon? (R. 60:7). Is anyone otherwise acquainted with Lamon? (R. 60:7). Is anyone related by blood or marriage, or otherwise acquainted with defense counsel or the Assistant District Attorney? (R. 60:8-9). Does anyone have any possible financial interest, or other possible interest in the outcome of the trial? (R. 60:10). Does anyone have some feeling of bias or prejudice for or against the State or the defendant, keeping in mind the charge of armed robbery? (R. 60:10). Does anyone have a compelling reason why they should not be compelled to serve for possibly two days? (R. 60:10). 756 Does anyone believe that they could not be fair and impartial? (R. 60:10-11). ¶ 8. Assistant District Attorney Jodi Dabson Bollendorf (Bollendorf) then conducted a general voir dire of the venire. Bell did not respond affirmatively to any of these questions, but other potential jurors answered yes to some of the questions. Specifically, Bollendorf asked: Is there any of you who has had contact with the Rock County District Attorney's Office in any capacity? As a victim, as a witness, as a defendant? Just to call up and ask a question or any capacity whatsoever? . . . No one's had contact. (R. 60:11). Is there any of you who has ever been a victim of a crime? (R. 60:11). Is there anyone here who has a close friend or relative who has been the victim of a crime? (R. 60:15). Are there other people besides those that have already raised their hands that are in that situation who have a close friend or relative who has been convicted? (R. 60:18). ¶ 9. Bollendorf then asked if anyone was acquainted with or knew of people involved in the incident.[2] Moreover, Bollendorf asked if anyone would have difficulty determining guilt or innocence based on the reasonable doubt standard, or whether they believed the standard should be different. Finally, Bollendorf asked whether there was any reason why a juror may not be able to sit in judgment of another. 757 ¶ 10. Defense counsel, Jeffery Livingston (Livingston), then conducted his voir dire. None of the prospective jurors responded to the following questions: Whether anyone had dealings with his law office under its current or past name. (R. 60:21). Had anyone been prosecuted for a traffic crime? (R. 60:21). Did anyone feel they could not hold the state to the high burden of beyond a reasonable doubt? (R. 60:21). Did anyone believe that a police officer made for a more believable witness? (R. 60:22). Did anyone believe that Lamon must have done something wrong to be in this position? (R. 60:22). Did anyone feel they would have a hard time judging the State's case without hearing Lamon testify, and would anyone hold it against the defense if the defense argued the State did not meet its burden and then the defense did not put on its own case? (R. 60:23). ¶ 11. The attorneys then exercised their peremptory strikes. Out of the presence of the jury Livingston challenged Bollendorf's peremptory strike of Bell. Livingston made a Batson challenge, asking for a race-neutral explanation of the strike, on grounds that the defendant was African-American, and the prosecutor struck the only African-American on the panel. Livingston also pointed out that the victim appeared to be approximately the same age and the same race as the juror who was struck. ¶ 12. The circuit court noted that Bell was the only African-American juror and noted that Bollendorf did not ask individual questions. The circuit court then asked Bollendorf for a reason for her peremptory strike. 758 ¶ 13. Bollendorf responded giving several reasons for her strike. First, Bollendorf said that her office and the federal prosecutor have prosecuted a number of Bells who live in Beloit through the years, and it is a well-known criminal name in Beloit. Next, Bollendorf pointed out that Bell's address is in a high crime area in Beloit and that the State obtained police reports evidencing police contacts at that address. These contacts, according to Bollendorf, ranged from civil processes to stolen vehicles. Bollendorf argued that Bell in the venire may be related to the people at that address, and that there was a number of police contacts at Bell's address, yet Bell did not answer the State's question regarding contact with their office or with law enforcement officers. Bollendorf also argued that Bell's juror card listed his employment as "varies." ¶ 14. In response to the prosecutor's answers, Livingston said that Bell is a fairly common name; Bell did not respond to the question about family members dealing with the district attorney's office; and Bollendorf did not question Bell individually as to whether he was related to the Bell family involved in criminal activity. Livingston also stated that the police contacts at Bell's address were mostly civil in nature, and that Bollendorf did not inquire individually into Bell's residence at that address. Livingston argued that Bollendorf could have asked Bell questions about these circumstances individually, and asked the court to individually voir dire Bell. ¶ 15. Bollendorf argued that Exhibit 1, the exhibit listing police contacts at Bell's address, clearly shows contacts with people named Bell. Bollendorf reiterated her concern that Bell was not completely forthright and honest as a prospective juror, because he did not answer the questions about whether a relative 759 had been convicted or the victim of a crime. This question was important because there was an incident at Bell's address where a "Mrs. Bell" reported her husband stole the car for purposes of supporting a drug habit. Bollendorf asserted that a lack of response from Bell the first time indicated he may not respond forthrightly with further voir dire, and the State didn't want to appear to single him out. ¶ 16. The circuit court found that Bollendorf had just cause for the peremptory strike, but did not elaborate on its decision. As a result Bollendorf's peremptory strike was allowed to stand. ¶ 17. At trial, the jury found Lamon guilty of armed robbery on April 15, 1999. On May 24, 1999, Lamon pled guilty to the charge of repeat offender and was sentenced to an indeterminate prison term not to exceed 20 years. ¶ 18. Lamon filed a post-conviction motion for a new trial on the grounds that the State's reasons offered for the peremptory challenge were not sufficient justifications. The circuit court, Honorable Daniel T. Dillon presiding, denied the motion on November 20, 2000, finding, inter alia, that it was reasonable for Bollendorf to conclude Bell was being less than candid in not mentioning these police contacts in which the victim presumably resided at the Bell residence. ¶ 19. The circuit court also determined that it was not necessary for the State to question Bell in front of the other jurors in order to prove the reason for the strike. ¶ 20. Lamon appealed and on April 4, 2002, the court of appeals held that Lamon failed to prove that the State did not have a race-neutral reason to strike Bell. The court of appeals held that the circuit court's ruling was not clearly erroneous to accept the 760 prosecutor's explanation that she did not ask Bell individual questions because she thought some of Bell's responses were not completely forthright and honest, and that she did not want to single Bell out. ¶ 21. Lamon petitioned this court for review. We granted review on September 26, 2002. II. PEREMPTORY STRIKES, THE BATSON TEST AND ITS PROGENY ¶ 22. Wisconsin has adopted the Batson principles and analysis. See State v. Davidson, 166 Wis. 2d 35, 39-40, 479 N.W.2d 181 (Ct. App. 1991); State v. Gregory, 2001 WI App 107, 244 Wis. 2d 65, 630 N.W.2d 711. For that reason, it is necessary that we begin our analysis with a summary of peremptory challenges and the Batson analysis. [1, 2] ¶ 23. Originating in English common law, the peremptory challenge is part of the fabric of our jury system and allows parties to strike a potential juror without a reason stated, without inquiry, and without being subject to the court's control.[3] The purpose of the peremptory strike is to eliminate extremes of partiality on both sides and help ensure that jurors will decide the case on the basis of the evidence presented. Swain v. State of Ala., 380 U.S. 202, 219 (1965). As a result, even though the peremptory strike is not constitutionally required, the United States Supreme Court said over a century ago that the peremptory challenge is "essential to the fairness of trial by jury." Batson, 476 U.S. at 107 (Marshall, J. concurring) (citing Lewis v. United States, 146 U.S. 370, 376 (1892)). 761 ¶ 24. A defendant's challenge to the State's use of peremptory strikes to deliberately remove jurors from the venire because of race was initially addressed by the U.S. Supreme Court in Swain, 380 U.S. 202. In that case the Court held that in order for a defendant to make a prima facie showing that the State had used peremptory strikes in contravention of equal protection principles, the defendant was required to show that a prosecutor had a pattern of using such strikes in a racially discriminatory manner "in case after case". Id. at 223. The high standard was set based on a belief that any limitation would radically alter the traditional unfettered nature of peremptory strikes. Id. at 221-22. See also, Batson, 476 U.S. at 98. ¶ 25. In 1986 the U.S. Supreme Court affirmed the prosecutor's general right to exercise peremptory strikes for any reason related to the prosecutor's view of the case outcome. Batson, 476 U.S. at 89. However, the Supreme Court held that: "the Equal Protection Clause forbids the prosecutor to challenge potential jurors solely on account of their race or on the assumption that black jurors as a group will be unable impartially to consider the State's case against a black defendant." Id. In Batson, the Court rejected Swain's "crippling" evidentiary burden for making a prima facie case of equal protection violation, and held that a defendant could establish a prima facie case by relying solely on the facts of his or her case. Id. at 91-92, 96. [3] ¶ 26. In reaching its decision, the Batson Court held that the "invidious quality" of government action alleged to be racially discriminatory in violation of the Equal Protection Clause "must ultimately be traced to a 762 racially discriminatory purpose." Id. at 93 (quoting Washington v. Davis, 426 U.S. 229, 240 (1976)).[4] [4] ¶ 27. As a result, the Batson Court outlined a three-step process for determining if a prosecutor's peremptory strikes violated the Equal Protection Clause. Id. at 96-98. [5] ¶ 28. First, in order to establish a prima facie case of discriminatory intent, a defendant must show that: (1) he or she is a member of a cognizable group and that the prosecutor has exercised peremptory strikes to remove members of the defendant's race from the venire,[5] and (2) the facts and relevant circumstances raise an inference that the prosecutor used peremptory strikes to exclude venirepersons on account of their race. Id. at 96. The circuit court must consider all relevant circumstances in determining whether a defendant made the requisite showing. Those circumstances include any pattern of strikes against jurors of the defendant's race and the prosecutor's voir dire questions and statements. The Batson Court expressed "confidence that trial judges, experienced in supervising voir dire, will be able to decide if the circumstances 763 concerning the prosecutor's use of peremptory challenges creates a prima facie case of discrimination against black jurors." Id. at 97. [6] ¶ 29. Under the second step of Batson, if the circuit court finds that the defendant has established a prima facie case, "the burden shifts to the State to come forward with a neutral explanation for challenging [the dismissed venireperson]." Id. The prosecutor's explanation must be clear, reasonably specific, and related to the case at hand. Id. at 98 n.20. However, the prosecutor's explanation need not rise to the level of justifying exercise of a strike for cause. Id. at 97-98. [7] ¶ 30. At the second Batson step, a "neutral explanation" means an explanation based on something other than the race of the juror. Id. at 98. Facial validity of the prosecutor's explanation is the issue. Unless discriminatory intent is inherent in the prosecutor's explanation, "the reason offered will be deemed race neutral." Hernandez, 500 U.S. at 360. Unless the prosecutor exercised a peremptory strike with the intent of causing disparate impact, that impact itself does not violate the principle of race neutrality. Id. at 362. [8] ¶ 31. A prosecutor's reasons for his or her peremptory challenge need not rise to the level of a for cause challenge. According to Purkett, the explanation proffered at the second step need not be "persuasive, or even plausible." Purkett v. Elem, 514 U.S. 765, 768 (1995). Purkett clarified Batson's requirement for a clear and reasonably specific explanation of legitimate reasons, related to the particular case, for exercising a challenged peremptory strike. The Purkett court said: 764 This warning was meant to refute the notion that a prosecutor could satisfy his burden of production by merely denying that he had a discriminatory motive or by merely affirming his good faith. What it means by a `legitimate reason' is not a reason that makes sense, but a reason that does not deny equal protection. Id. at 769. Moreover, as noted previously, the Court in Purkett said that even a "silly or superstitious" reason, if facially nondiscriminatory, satisfies the second step of Batson. Id. at 768. [9, 10] ¶ 32. Finally, the third step of Batson requires that when the prosecutor offers a race-neutral explanation, the circuit court has the duty to weigh the credibility of the testimony and determine whether purposeful discrimination has been established. Batson, 476 U.S. at 98. As part of this third step, a defendant may show that the reasons proffered by the State are pretexts for racial discrimination. State v. Walker, 154 Wis. 2d 158, 176 n.11, 453 N.W.2d 127 (1990). The defendant then has the ultimate burden of persuading the court that the prosecutor purposefully discriminated or that the prosecutor's explanations were a pretext for intentional discrimination. Batson, 476 U.S. at 94 n.18, 98. Therefore, it is at this step that the issue of persuasiveness and plausibility of the prosecutor's reasons for the strike become relevant, and "implausible or fantastic justifications may [] be found to be pretexts for purposeful discrimination." Purkett, 514 U.S. at 768. ¶ 33. In addition to accepting "silly", "superstitious" justifications for striking a juror, intuitive strikes have been upheld as valid strikes. United States v. Terrazas-Carrasco, 861 F.2d 93, 94-95 (5th Cir. 1988). See also United States v. Williams, 934 F.2d 847, 850 765 (7th Cir. 1991) (holding that adequate explanations for exercising a peremptory strike may include a prosecutor's "intuitive assumptions that are not fairly quantifiable."). [11] ¶ 34. Applying Batson and its progeny, the rule today is that the Equal Protection Clause is not violated simply because there is a racially discriminatory or a disparate impact. Proof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection Clause. As noted previously, the Court in Hernandez said: "Discriminatory purpose [] implies more than intent as volition or intent as awareness of consequences. It implies that the decisionmaker [] selected [] a particular course of action at least in part because of, not merely in spite of, its adverse effects upon an identifiable group." Hernandez, 500 U.S. at 360 (internal citations and quotations omitted). ¶ 35. Despite the protections outlined in the three-part test of Batson, Lamon contends that discrimination in jury selections "remains widespread." (Pet'r Br. at 7). We recognized 13 years ago that racial discrimination in the jury selection process harms three distinct groups. Walker, 154 Wis. 2d 158 at 171. First, defendants are harmed when racial discrimination infects the jury selection process. Id. Second, the rights of the excluded jurors are violated when they are denied the opportunity to serve as jurors on account of race. Id. (citing Batson at 86-87). Third, society is harmed because such discriminatory procedures undermine public confidence in the fairness of our system of justice. Id. That being said, we believe that the three-part Batson test acknowledges those potential dangers, and guards against the deprivation of equal protection. Batson, 476 U.S. at 86. 766 III. ISSUES ¶ 36. This court is presented with two issues. First, we must answer whether the circuit court's application of the Batson test was incomplete, so that our review should be de novo. Batson, 476 U.S. at 96-98. ¶ 37. Based on the U.S. Supreme Court's decision in Hernandez, we hold that the appropriate standard of review is clearly erroneous.[6] Given the similar facts of this case, the determination of the credibility of prospective jurors and attorneys by the circuit court will be given great deference, and will not be overturned unless it was clearly erroneous. Here, the circuit court judge was present during the voir dire, and thus, had sufficient opportunity to observe the prospective juror and to ascertain the credibility of Bollendorf's reasons for her peremptory strike of Bell. ¶ 38. Second, we must determine whether it was clearly erroneous for the circuit court judge to permit the prosecution's peremptory challenge of Bell to stand. We hold that under the totality of the circumstances in this case, individual questions did not have to be asked of the stricken juror, Bell. Bollendorf proffered several race-neutral reasons for the strike, reinforced with evidence demonstrating a lack of discriminatory intent. The primary credibility determination relates to the proponent of the strike, and the circuit court judge is in the best position to make an appropriate determination. The record in this case supports the circuit court's decision to allow Bollendorf's peremptory strike to 767 stand. As a result, we hold that the circuit court decision was not clearly erroneous in accepting Bollendorf's reasons for striking Bell in this case. IV. STANDARD OF REVIEW ¶ 39. We must first determine the appropriate standard of review. ¶ 40. Lamon argues that, although the general rule set forth in Batson and Hernandez is to apply a clearly erroneous standard, the facts of this case warrant de novo review. Based on Holder v. Welborn, 60 F.3d 383, 388 (7th Cir. 1995), de novo review is appropriate because the circuit court did not have the opportunity to assess the credibility of the stricken juror. Lamon maintains that the lack of voir dire of Bell in this case prevented the circuit court judge, Judge Edwin C. Dahlberg, from determining Bell's credibility, which is essential in making a proper step three Batson evaluation. Accordingly, Lamon argues that a basis for deference does not exist in this case, and therefore, this court should apply a de novo standard of review. ¶ 41. As noted previously, we affirm the court of appeals' application of the clearly erroneous standard of review as established in Batson and Hernandez. Batson, 476 U.S. at 98 n.21; Hernandez, 500 U.S. at 364. The Court in Batson held that discriminatory intent is a question of fact decided by the circuit judge. Batson, 476 U.S. at 98 n.21. Moreover, the U.S. Supreme Court held that, like any other factual finding, a trial court's conclusion on the issue of discriminatory use of peremptory challenges at step three should be given great deference. Id. See also Hernandez, 500 U.S. at 364. ¶ 42. In reaching that decision the Batson Court held that the trial court judge is in the best position to determine the credibility of the state's race-neutral 768 explanations, so great deference will be given to that ruling. Batson, 476 U.S. at 98 n.21 (quoting Anderson v. Bessemer City, 470 U.S. 564, 573 (1985)). ¶ 43. The general rule in Batson remains good law, and was reiterated and emphasized in Hernandez, 500 U.S. at 365. Hernandez held that the circuit court's finding on the issue of discriminatory intent should not be overturned unless it is found that the determination was clearly erroneous. Id. at 369. The Hernandez Court explained: Deference to trial court findings on the issue of discriminatory intent makes particular sense in this context because, as we noted in Batson, the finding "largely will turn on evaluation of credibility." In the typical peremptory challenge inquiry, the decisive question will be whether counsel's race-neutral explanation for a peremptory challenge should be believed. There will seldom be much evidence bearing on that issue, and the best evidence often will be the demeanor of the attorney who exercises the challenge. As with the state of mind of a juror, evaluation of the prosecutor's state of mind based on demeanor and credibility lies "peculiarly within a trial judge's province." Id. at 365 (citations omitted). ¶ 44. As a result of the U.S. Supreme Court's holding that the trial court's decision on the ultimate question of discriminatory intent represents a finding of fact, the Hernandez court expressly rejected the notion of independent appellate review and said: We have difficulty understanding the nature of the review petitioner would have us conduct. Petitioner explains that "[i]ndependent review requires the appellate court to accept the findings of historical fact and credibility of the lower court unless they are clearly erroneous. Then, based on these facts, the appellate 769 court independently determines whether there has been discrimination." But if an appellate court accepts a trial court's finding that a prosecutor's race-neutral explanation for his peremptory challenges should be believed, we fail to see how the appellate court nevertheless could find discrimination. The credibility of the prosecutor's explanation goes to the heart of the equal protection analysis, and once that has been settled, there seems nothing left to review. Id. at 366-67 (citations omitted).[7] [12, 13] ¶ 45. Wisconsin law is in accord with the U.S. Supreme Court, holding that discriminatory intent is a question of historical fact, and the clearly erroneous standard of review applies at each step of the Batson analysis. State v. Gregory, 2001 WI App 107, ¶ 5, 244 Wis. 2d 65, 630 N.W.2d 711; State v. Lopez, 173 Wis. 2d 724, 496 N.W.2d 617 (Ct. App. 1992). ¶ 46. However, as pointed out by Lamon, there is an exception, recognized by some courts, to the general rule of giving deference to the lower court. According to this exception, de novo review is appropriate if the trial court judge does not have an opportunity to evaluate credibility. Holder, 60 F.3d at 388 (7th Cir. 1995). In Holder, the Seventh Circuit Court of Appeals held that when a trial court judge is not in a position to observe the members of the venire as they answered questions in order to make credibility determinations, deference will not be given to the decision and a de novo standard of review is appropriate. Id. 770 ¶ 47. In Holder the habeas court held a Batson hearing eight years after the original voir dire and trial. The habeas judge and the magistrate conducting the Batson hearing had not been present at the original voir dire proceeding, and "therefore did not have the opportunity to observe the demeanor of the members of the venire as they answered the questions posed by the attorneys." Id. Furthermore, the attorneys had little memory of the actual voir dire. Consequently, the habeas court was in no better position to judge the credibility of the prosecutor or the eliminated jurors than the appellate court. In light of the aforementioned circumstances, great deference to the trial court's decision was not warranted, and the appellate court applied a de novo standard of review. Id. ¶ 48. Using Holder, Lamon asserts that de novo review is required in this case because the reasons set forth for application of the clearly erroneous standard in Batson and Hernandez do not apply here. It is argued that Judge Dahlberg was unable to evaluate the credibility of Bell; therefore, the basis of the Hernandez rule does not apply. ¶ 49. As noted previously both Batson and Hernandez state that the trial court's decision enjoys great deference because that judge is in the best position to evaluate the credibility of the juror and the credibility of the prosecutor's proffered reasons for using a peremptory strike. ¶ 50. Like the magistrate in Holder, who was unable to evaluate the credibility of the juror, Lamon argues that Judge Dahlberg was not privy to an individual voir dire of Bell. As a result, this court should apply the de novo standard of review in Holder when examining prosecutorial or juror credibility. 771 ¶ 51. Conversely, the State argues that the clearly erroneous standard should apply. Great deference should be given to the circuit court judge here because he was present to personally observe and to ascertain the credibility of the attorneys and jurors. The State maintains that Holder is not the controlling standard of review for the case at bar, because the procedural circumstances in Holder are distinguishable. In Holder the Batson hearing was conducted eight years after the original voir dire and trial, and the presiding judge and magistrate were not present at the original voir dire. In contrast, here, the circuit court judge was able to oversee the entire voir dire process. ¶ 52. We agree with the State's arguments. Although Lamon attempts to rely on Holder in support of her argument that the de novo standard is the appropriate standard of review, Holder is procedurally distinguishable and not controlling in this case. Holder, 60 F.3d 383. ¶ 53. Unlike the magistrate in Holder, the record in this case illustrates that the circuit court judge had sufficient opportunity to examine the credibility of the prosecutor's justifications for the strike. In this case, Judge Dahlberg had other first-hand information concerning the prospective juror along with the opportunity to observe personally Bell's response. Hernandez held that it is the province of the trial judge to weigh credibility because of the nature of that position, but did not hold that credibility could only be established through hearing personalized voir dire questions and answers. Hernandez, 500 U.S. at 365. Moreover, a juror's responses to voir dire may not be the judge's sole piece of information to be weighed in a circuit court judge's evaluation in a Batson hearing determination. As previously noted, in the third step of Batson the 772 court evaluates the overall credibility of the prosecutor's proffered explanations. Discriminatory intent, if it were present, would emanate from the attorney striking the juror. Hence, the judge's interpretation of the attorney's credibility is a key factor, and any juror's responses would only supplement that decision. In this case the circuit court judge had ample opportunity to weigh the prosecutor's credibility. ¶ 54. This case involves the same type of situation that was present in Hernandez. This case involves the striking of a potential juror who is of the same race as the defendant. The circuit court judge in this case was in the best position to evaluate the level of Bollendorf's knowledge of information relating to Bell, in combination with Bell's non-responsiveness to the general voir dire. As in Hernandez, the circuit court judge in this case chose to believe the State's race-neutral explanations for the challenge. Hernandez, held that such a determination was a pure issue of fact under Batson and was subject to review under a deferential standard. Hernandez, 500 U.S. at 364. In reaching its decision the Hernandez Court held that a clearly erroneous standard was in accord with the treatment of that issue in other equal protection cases. Id. at 364-70. [14] ¶ 55. It is important to note that an inflexible rule applying a clearly erroneous standard in all cases may be troublesome in certain situations. Therefore, in limited situations where the fact that a member of the venire has not been questioned individually contributes to the totality of the circumstances disproving the credibility of the explanation offered by the prosecution, de novo review may be the appropriate standard, as it was in Holder. 773 ¶ 56. Lamon is correct that lack of personalized voir dire of a juror may be a factor, which inhibits a judge's evaluation of credibility in peremptory challenge explanations. However, inhibiting is not equivalent to removing the ability to determine. A judge could have a basis for making a credibility determination without individualized voir dire. As in this case, a judge could use other pieces of information, or "factors" to determine credibility. Here, the circuit court judge relied on, inter alia, Bell's lack of response to general voir dire questions. This appeared to show a lack of candor, when combined with the information in the police report. ¶ 57. As a result, we hold that based on the U.S. Supreme Court's decision in Hernandez, the facts of this case require us to give deference to the circuit court. Thus, we will not overturn the circuit court's decision unless we find it to be clearly erroneous. ¶ 58. We hold that under the circumstances of this case the prosecutor was not required to ask individual questions of the stricken juror. The totality of the circumstances here convince us that de novo review is not required. V. ARGUMENTS ABOUT RACE-NEUTRAL JUSTIFICATIONS FOR PEREMPTORY STRIKES ¶ 59. Given the long history of racial discrimination in jury selection, Lamon asks this court to reverse the decision of the court of appeals, and remand the case for a new trial.[8] ¶ 60. With regard to step three of the Batson test, Lamon maintains the prosecutor, without asking Bell 774 individual voir dire questions, illustrated evidence of modern-day jury selection discrimination. Lamon argues that peremptory challenges cannot be based solely on race, yet Bell was the only African-American in the venire. Lamon argues, inter alia, that it is the circuit court's guidance in making the decision to uphold the peremptory strike, rather than the sufficiency of the reasons given by Bollendorf, that must be examined. Lamon asserts that the totality of the circumstance test plus "other factors" established in Walker should be used during step three of the Batson test because the judge must weigh the totality of the circumstances. (Pet'r Br. at 10) (citing Walker, 154 Wis. 2d at 174-175). In support of this argument, Lamon argues that courts in other jurisdictions have held that the failure to voir dire a stricken juror is a factor in showing discriminatory intent. ¶ 61. Lamon argues that the State's refusal to conduct individual voir dire of Bell raises the inference that the State knew its race-neutral reasons for the strike would not be supported by the facts. In addition, Lamon maintains that the State's evidence in Exhibit 1, a list of police contacts at Bell's address, was not sufficient to support any proffered race-neutral claims. To the contrary, Lamon claims that the list does not conclusively prove that any arrests or convictions occurred at Bell's address. One contact with someone named Bell was civil in nature and the other ended in a withdrawn complaint. Additionally, Lamon claims that the evidence does not sufficiently prove whether prospective juror Bell lived at that address at the time of any of the listed occurrences. Finally, Lamon contends that Bell is a common name and should not necessitate an assumption of crime association. 775 ¶ 62. Lamon maintains prospective juror Bell did not fail to disclose anything during the general voir dire. The State never specifically asked the venire whether any of them had "contact" with police, yet the State claimed one of the reasons for striking Bell was that he did not respond to questions about having contact with law enforcement officers. ¶ 63. Lamon further contends that the State prejudged Bell when the State claimed that Bell might not have been forthright if asked follow-up questions. The failure to ask follow-up questions, according to Lamon, is demonstrative evidence of the prosecutor's discriminatory intent. ¶ 64. Next, Lamon argues that both the Gregory holding and the findings in the post-conviction motion are contradictory and should be ignored. Gregory, 244 Wis. 2d 65. Lamon contends that Gregory states that the decision in a Batson ruling must be made before the jury is sworn; thus, the State should not be able to rely on the findings of the post-conviction motion. Id., ¶ 14. As such, Lamon argues that reliance on Judge Daniel T. Dillon's post-conviction findings would overrule Gregory. Alternatively, Lamon argues that Gregory is not applicable to this case because the juror who was struck in Gregory was questioned individually.[9] ¶ 65. Beyond the refusal to individually voir dire Bell, Lamon argues that the State's use of certain terms and phrases was discrimination in disguise. For example, Lamon contends that "high crime area" was code 776 for "black neighborhood," and "varied employment" was code for "unemployed person."[10] ¶ 66. Moreover, Lamon contends the State's claim that "individual questions for Bell would have singled him out" does not qualify as a race-neutral reason. Lamon notes that the prosecutor singled out white jurors for individual voir dire; therefore, asking Bell questions would not have isolated him. ¶ 67. Finally, given the above arguments, Lamon argues a new trial is warranted because the commission of a Batson error is not harmless error. Lamon cites a Second Circuit decision, Tankleff, where the court held a Batson error is a "structural error," which is not subject to harmless error review. Tankleff v. Senkowski, 135 F.3d 235, 248 (2d Cir. 1998). ¶ 68. The State disagrees and asserts that even though the law has expanded to protect against discrimination since Batson, the right to exercise peremptory challenges is still protected. Additionally, the State asserts that evidence of a potentially discriminatory or disparate impact is not sufficient to establish a Batson violation. To the contrary, discriminatory intent must be proven, and according to Purkett v. Elem, 514 U.S. 777 765, 769, 775 (1995), almost any legitimate explanation given for a strike could satisfy the second step of Batson. ¶ 69. The State maintains that Bollendorf gave several race-neutral reasons for using her peremptory strike. Those reasons were based on information obtained before voir dire, and on Bollendorf's observations of Bell during voir dire. The reasons given by Bollendorf for her peremptory strike of Bell included: (1) that her office and the federal prosecutor have prosecuted a number of Bells who live in Beloit through the years, and it is a well-known criminal name in Beloit; (2) that Bell's address is in a high crime area in Beloit, and that the State obtained police reports evidencing police contacts at that address;[11] (3) that Bell's juror card listed his employment as "varies," which goes to his responsibility as a juror; and (4) that Exhibit 1, containing the police contacts at Bell's address, spoke for itself. The State further argued that a lack of response from Bell during the initial voir dire indicated that he may not respond forthrightly with further questioning, and the State didn't want to appear to single him out. ¶ 70. As stated earlier, the third step of Batson is the relevant inquiry in this case.[12] In examining that step, Purkett held that the burden of persuasion showing 778 a racially motivated strike rests with the opponent of the strike. Purkett, 514 U.S. at 767. The State argues, using the totality of the circumstances test, that Lamon did not carry the burden of proving discriminatory intent. The application and outcome of the totality of the circumstances test is determined on a case-by-case basis. The State maintains that the individual reasons given by the prosecutor should be viewed in combination with one another. ¶ 71. In addition, the State argues that Lamon overstates the holding in Walker with respect to the totality of the circumstances test. Possible factors that may raise an inference of discrimination could contradict each other. For example, failure to examine a juror or singling a juror out could each be argued to weigh against race neutrality, so it is important to examine the other circumstances surrounding the strike. [15] ¶ 72. Finally, the State relies on the holding in Davidson, which held that individual follow-up questions are not required in order to strike a potential juror. Davidson, 166 Wis. 2d 35. Accordingly, the statement that the prosecutor believed Bell would not be forthright was based on research combined with Bell's unresponsiveness to general voir dire questions. Hunches are permissible when there is no discriminatory intent, and discriminatory intent must be proven by the opponent of the strike. VI. APPLICATION OF THE CLEARLY ERRONEOUS STANDARD TO THE JUSTIFICATION OFFERED ¶ 73. As noted above, this case concerns the third step of the Batson test. ¶ 74. Applying the clearly erroneous standard of Hernandez, we uphold the decision of the court of 779 appeals that no Batson violation occurred. The prosecutor gave credible, race-neutral, reasons upon questioning by the court for her peremptory challenges. In this case the record shows that the prosecutor had done research about Bell, which stands in stark contrast to the prosecutor in Walker who struck the only African-American without knowing anything about the juror. Walker, 154 Wis. 2d 158. ¶ 75. In Walker, the defendant, an African-American, was charged with armed robbery. The jury selection consisted of twenty possible jurors and only one was an African-American. During the voir dire examination of potential jurors, the record in Walker showed that African-American venireperson "did not answer in a way that would suggest a disqualifying attitude to any general questions directed at the pool of jurors by the judge or by the lawyers, nor did the court or counsel ask the [African-American] venireperson any specific questions." Walker, 154 Wis. 2d at 164. In seating a twelve-person jury the prosecutor and defense counsel were each allowed to use peremptory challenges to eliminate four of the venirepersons from the pool. The prosecutor in Walker used his third peremptory challenge to eliminate the only African-American venireperson. Id. On review this court found that the record in Walker indicated "that every prosecution witness was white while all alibi witnesses for the defense were [African-American]." Id. at 178. Moreover, when asked his reason for the strike, the prosecutor admitted that he struck the African-American venireperson "because he knew nothing about him." Id. Upon an independent review of the record, this court found the two reasons provided by the prosecutor for using a peremptory challenge to strike the only African-American venireperson unacceptable. This court said: 780 First, the prosecutor denied that he had a discriminatory motive. The Court in Batson declared that the mere denial of discriminatory intent is not sufficient to rebut an inference of purposeful discrimination. Batson, 476 U.S. at 98. Second, the prosecutor explained that, going into the jury selection process for Walker's trial, he only had information about jurors with juror numbers between 841 and 906. The black venireperson had a juror number of 944. The prosecutor thus stated that he struck the black venireperson because he had no information about him. This explanation is unacceptable because it is not "clear and reasonably specific." Moreover, this explanation appears to be pretextual. Id. at 178. Accordingly, this court held that the facts in Walker "raise[ed] an inference of purposeful discrimination" on behalf of the prosecutor. Id. ¶ 76. Thus, unlike the situation in Walker, Bell's lack of response to several questions, in combination with Bollendorf's information on Bell, gave support to Bollendorf's explanation for her peremptory strike of Bell. As noted previously, the U.S. Supreme Court recently addressed the matter of credibility of a prosecutor's reasons for his or her use of a peremptory strike in Miller-El v. Cockrell and said: "Credibility can be measured by, among other factors, the prosecutor's demeanor; by how reasonable, or how improbable, the explanations are; and by whether the proffered rationale has some basis in accepted trial strategy. Miller-El v. Cockrell, 537 U.S. 322, 123 S.Ct. 1029 (2003). The Court held that a state court need not make detailed findings addressing all the evidence before it. Id. ¶ 77. Although it may be argued that Judge Dahlberg did not set forth enough reasons for his decision to allow the State's strike to stand, such an argument is weakened by the holding in Miller-El, where the Court 781 held that it was not necessary to make detailed findings so long as the arguments were adequately considered. Id. ¶ 78. Determining discriminatory intent under Batson simply requires the consideration of the "totality of the relevant facts." Hernandez, 500 U.S. at 363; see also Walker, 154 Wis. 2d at 173-74, 179. ¶ 79. Turning to the facts of this case, it is undisputed that the only African-American juror was struck from the venire, and the defendant is African-American. However, when questioned by the circuit court judge, the State offered several race-neutral reasons for exercising her peremptory challenge against Bell. A. Name/Address ¶ 80. When questioned why she struck Bell, Bollendorf explained that the prosecutor's office, as well as the federal prosecuting attorney's office, had prosecuted a number of Bells who live in Beloit. According to Bollendorf, Bell is a well-known criminal name in Beloit. Next, the State noted Bell's address is in a high crime area in Beloit and that the State obtained police reports evidencing police contacts at that address. These contacts ranged from civil processes to stolen vehicles. The State argued that the Bell in the venire may be related to the people at that address and that there were a number of police contacts at Bell's address, yet Bell did not answer the State's question regarding contact with the district attorney's office or with law enforcement officers. Furthermore, he did not mention anything about relatives who may have had contacts, even though, in Exhibit 1, Bells are listed at his address. 782 [16, 17] ¶ 81. The Federal Court for the Western District of Wisconsin held in Davidson v. Gengler, 852 F.Supp. 782, 788 (W.D. Wis. 1994) that a prosecutor's knowledge that a challenged juror possessed the same name as known criminals in the area was a race-neutral explanation. Similarly, striking an African-American juror because of a familial relationship to individuals involved in the criminal justice system is a neutral reason to strike a juror. Id. ¶ 82. In reaching its decision the Gengler court relied on a number of cases. First, the court relied on United States v. Johnson, 941 F.2d 1102 (10th Cir. 1991), which held that striking a potential juror, who was African-American, because his brother was once convicted of a crime and because his family history suggested anti-government bias, were race-neutral reasons for a peremptory strike. Id. at 1109. Prior family involvement with drug offenses is a race-neutral basis to strike such a potential juror. United States v. Bennett, 928 F.2d 1548, 1551 (11th Cir. 1991) superseded by statute as stated in United States v. Smith, 127 F.3d 1388, (11th Cir. 1997). See also United States v. Hughes, 911 F.2d 113, 114 (8th Cir. 1990) (incarceration of nephew of African-American potential juror is a race-neutral reason for a strike). [18] ¶ 83. Additionally, when a potential juror has the same last name as someone previously convicted by the prosecutor, courts have accepted it as a race-neutral reason for a peremptory strike. Terrazas-Carrasco, 861 F.2d at 94-95 n.1. ¶ 84. In Terrazas-Carrasco the court of appeals held that the district court was not clearly erroneous in determining that a prosecutor's use of peremptory 783 challenges to exclude Hispanic veniremen from the jury did not violate defendant's equal protection rights. With respect to the prosecutor's use of peremptory challenges to exclude the Hispanic veniremen, the Fifth Circuit said: We "must accept the [inquiring] judge's credibility choice" with respect to the prosecutor's reasons. Valid reasons for exclusion may include "intuitive assumptions" upon confronting a venireman. In Lance, we upheld such factors as eye contact, demeanor, age, marital status, and length of residence in the community as valid grounds for peremptory challenge. In this case, the reasons articulated are of the same variety. Id. at 94-95 (citing United States v. Lance, 853 F.2d 1177, 1181 (5th Cir. 1988)). In footnote one of Terrazas-Carrasco the court stated that the valid, race-neutral reasons articulated for the peremptory strike in that case "include having the same last name as someone previously convicted by the prosecutor; age; eye contact; and body language." Id. at 95 n.1 (emphasis added). [19] ¶ 85. Along with names, addresses may provide an acceptable race-neutral justification for a peremptory strike. As noted by the State in its brief, case law is quite clear that location of a venireperson's residence provides a race-neutral reason for a peremptory strike when a residential location has some relationship to the facts of the case. (Resp't Br. at 22 n.3). For example, in United States v. Briscoe, the court upheld a peremptory strike where prosecutor's explanation "went well beyond a cursory statement that Mr. Jeffries resided on the west side of Chicago." United States v. Briscoe, 896 F.2d 1476, 1488 (7th Cir. 1990). However, courts have recognized that allowing the exclusion of African-American venirepersons simply because they live or 784 work in an area frequented by gangs has "an enormous potential to disproportionately exclude black jurors in most cases involving black gang members." Williams v. Chrans, 957 F.2d 487, 489-90 (7th Cir. 1992). With respect to the issue of resident location, the Ninth Circuit said: "[w]hat matters is not whether but how [a] residence is used." United States v. Bishop, 959 F.2d 820, 826 (9th Cir. 1992). ¶ 86. In support of the proffered race-neutral reasons for the peremptory strike the State introduced Exhibit 1 during the Batson hearing. Exhibit 1 listed several law enforcement contacts at the address that Bell had listed in his juror questionnaire. One of those contacts involved a complaint about a stolen vehicle and parties who were named Bell. Accordingly, Exhibit 1, like the case in Briscoe, explained the nature and previous use of the residence, which went beyond a "cursory statement" that Bell simply lived in a high crime area. Id. B. Juror Veracity [20] ¶ 87. Furthermore, the State argued that Exhibit 1, coupled with Bell's lack of response, indicated that he may not respond forthrightly to further voir dire questions directed to him. Bell's failure to disclose during voir dire any police contacts at his residence is a plainly race-neutral justification for striking him. See Coulter v. Gilmore, 155 F.3d 912, 919-20 (7th Cir. 1998) (calling the prosecutions striking of two venirepersons because they failed to disclose that they had been previously charged with crimes "legitimate and non-discriminatory"). See also Baldwin v. State, 732 So.2d 236, 243 (Miss. 1999) (prosecutor's explanation that 785 venirepersons lived in high drug trafficking areas and had family members who had been convicted of crimes found to be race-neutral). C. Not Wanting to Single Him Out [21] ¶ 88. The defense maintains that Bollendorf could have asked Bell individual questions on voir dire. Bollendorf stated that she did not want to appear to single Bell out. While the lack of personalized voir dire of a juror may inhibit a judge's evaluation of the attorney's credibility in peremptory challenge explanations, inhibiting is different than eliminating the opportunity to determine credibility altogether. ¶ 89. Questioning or failing to question a potential juror presents a problematic tautology. Failing to examine a juror, or conversely singling out a juror, can be equally argued to weigh against a race neutral justification for a peremptory strike. In Gengler the court held that a prosecutor was allowed to rely on information other than individual voir dire to provide a basis for his race neutral explanation. Gengler, 852 F. Supp. at 789. According to Gengler individual follow-up questions on voir dire are not required in order to strike a potential juror. In this case the refusal to conduct individualized voir dire of Bell may be an isolated factor arguably evidencing discriminatory intent. However, this factor alone is not conclusive of discrimination during jury selection. In light of the totality of the circumstances, the numerous race-neutral reasons proffered by the State outweigh any alleged discriminatory intent resulting from the failure to question Bell further. 786 D. Unemployment [22] ¶ 90. The State also explained that Bell's juror card listed his employment as "varies," which goes to his responsibility as a juror. The Seventh Circuit has held that unemployment may provide a sufficiently race-neutral explanation for a strike. United States v. Lewis, 117 F.3d 980, 983 (7th Cir. 1997). In reaching that decision the court in Lewis relied on cases which recognize unstable employment, or unemployment status, as sufficient race-neutral explanations for a peremptory strike. Id. (citing United States v. Hunter, 86 F.3d 679, 683 (7th Cir. 1996), cert. denied, 519 U.S. 985, 117 S.Ct. 443, 136 L.Ed.2d 339 (1996) and United States v. Hughes, 970 F.2d 227, 230-31, (7th Cir. 1992)). See also United States v. Jackson, 914 F.2d 1050, 1052-53 (8th Cir. 1990); State v. Hernandez, 170 Ariz. 301, at 305, 823 P.2d 1309 (1991). E. Totality of the Circumstances [23] ¶ 91. It is clear from the record that the evidence in Exhibit 1, as well as clear case law, supported Bollendorf's explanations for her peremptory strike. Bollendorf relied on a detailed police report of contacts at Bell's address, along with her personal knowledge of prosecutions against other persons named Bell, and her observations of Bell and his answers during voir dire. Based on the race-neutral reasons offered by Bollendorf for her peremptory strike, we find that Lamon did not meet the burden of proof required to show that the State's reasons were not race-neutral. Accordingly, we affirm the court of appeals' decision and hold that the decision of circuit court in allowing the strike to stand 787 was not clearly erroneous. As a result, we find no error and need not engage a harmless error analysis. VII. CONCLUSION ¶ 92. In summary, we affirm the court of appeals' decision. The decision of the circuit court was not clearly erroneous when it determined that the State's reasons for striking the juror were race-neutral; and, therefore, allowed the peremptory strike of Bell to stand. The State listed several acceptable race-neutral reasons for its strike of Bell and provided a detailed police report of contacts at Bell's address in support of its reasons for the strike. Although the State did not individually question Bell further, Davidson instructs that such questioning is not necessary. Furthermore, under the totality of the circumstances test, any alleged discriminatory intent evidenced by the prosecutor's decision not to question Bell individually, was out-weighed by the race-neutral explanations offered. ¶ 93. Based on well-settled law, we accord deference to the decision of the circuit court in this case and hold it was not clearly erroneous to accept the reasons offered by the State in justification for its peremptory strike.[13] By the Court.The decision of the court of appeals is affirmed. 788 ¶ 94. SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE (dissenting). The majority ignores well-established case law. In so doing, the majority prohibitively raises the bar for a defendant raising a Batson challenge, lowers the bar for circuit courts that conduct Batson hearings, and neglects its duty to review circuit court determinations that no Batson violation has occurred, rendering the Constitution's prohibition on the exclusion of persons from jury service on account of race an illusion in Wisconsin courts. I therefore dissent. ¶ 95. Justice Thurgood Marshall, concurring in Batson v. Kentucky, 476 U.S. 79 (1986), warned that the Batson decision would not effectively eliminate discrimination in the selection of juries if prosecutors' easily asserted race-neutral explanations were simply accepted at face value.[1] Justice Marshall explained: Any prosecutor can easily assert facially neutral reasons for striking a juror, and trial courts are ill equipped to second-guess those reasons. How is the court to treat a prosecutor's statement that he struck a juror because the juror had a son about the same age as the defendant, or seemed "uncommunicative," or "never cracked a smile" and, therefore, "did not possess the 789 sensitivities necessary to realistically look at the issues and decide the facts in this case"? If such easily generated explanations are sufficient to discharge the prosecutor's obligation to justify his strikes on nonracial grounds, then the protection erected by the Court today may be illusory.[2] ¶ 96. The majority today approves of the very behavior against which Justice Marshall warned. ¶ 97. The circuit court in the present case did not fulfill its duty under the third step of the Batson analysis. It upheld the prosecutor's peremptory strike of Dondre Bell, the lone African-American on the venire, without looking beneath the surface of the prosecutor's race-neutral reasons for striking him and without considering the totality of the circumstances surrounding jury selection. It summarily concluded that the State "made its case" without any analysis or findings of fact on the ultimate issue of whether the State discriminated when it struck Bell. ¶ 98. Instead of holding the circuit court to its duty, the majority rubber stamps the circuit court's conclusion under the guise of deference. Moreover, the majority misconstrues the law to hold that the mere ability to assert easily generated, facially neutral reasons for striking a juror discharges the State's constitutional obligation to select a jury without discriminating on the basis of race, thereby lowering the bar for circuit courts that conduct Batson hearings and raising the bar for defendants bringing a Batson challenge. ¶ 99. This case should be remanded to the circuit court for a proper Batson hearing. First, the law is clear that the circuit court has a duty under the third step of 790 the Batson inquiry to consider all of the relevant facts surrounding jury selection and to determine whether the defendant has met her burden of proving purposeful discrimination based on race. Second, since there is no evidence in this case that the circuit court fulfilled its duty, the deference normally due its determination is inappropriate here. The majority opinion, far from recognizing this fact, fails in its own duty to properly review the decision of the circuit court. Third, had either the circuit court or the majority bothered to look, there are ample warning signs in this case that the prosecutor's actions were driven by the race of the struck venire member and were thus unconstitutional. A prosecutor's historical privilege of peremptory challenge free of judicial control is limited by the constitutional prohibition on exclusion of persons from jury service on account of race.[3] I ¶ 100. This case involves step three of the Batson analysis. Under Batson, three steps must be taken for the defendant to successfully prove that the State's peremptory challenge of Bell violated her constitutional right to equal protection: (1) the defendant must make a prima facie showing that the prosecution has exercised peremptory challenges on the basis of race; (2) if the defendant satisfies this threshold, the burden then shifts to the prosecution to articulate a race-neutral justification for the disputed challenges; and (3) if a race-neutral explanation is tendered, the court has a duty to determine whether, in light of the proffered justification, the defendant has satisfied the burden of proving purposeful discrimination. 791 ¶ 101. No dispute exists in the present case that the defendant made a prima facie showing of discrimination against a black juror under the first step of the Batson analysis. Likewise, no dispute exists in this case that the State articulated race-neutral reasons for challenging the lone black juror under the second step of the Batson analysis. The issue presented in this case is whether the circuit court properly determined whether the defendant met her burden of establishing purposeful discrimination under the third step in the Batson analysis. ¶ 102. The majority opinion, however, never decides whether the circuit court properly exercised its discretion under step three of the Batson analysis. The majority errs by conflating the second and third steps of the Batson analysis and by concluding that the State's satisfaction of step two is sufficient, in and of itself, to defeat a charge of purposeful discrimination. The majority opinion concludes, "[B]ased on the race-neutral reasons offered by [the prosecutor] for her peremptory strike, we find that [the defendant] did not meet the burden of proof required to show that the State's reasons were not race-neutral."[4] Furthermore, the majority opinion holds, "The decision of the circuit court was not clearly erroneous when it determined that the State's reasons for striking the juror were race-neutral; and, therefore, allowed the peremptory strike of Bell to stand."[5] The majority's conclusions simply affirm what both parties have already conceded: the State's proffered reasons for striking Bell were race-neutral. 792 ¶ 103. The step three determination under Batson requires more than a conclusion that a prosecutor has put forth race-neutral reasons for striking a particular juror.[6] At step three, the circuit court is charged with testing those proffered reasons. A reason that appears on its face to be race-neutral may turn out to be, upon further examination, a pretext for racial discrimination. Similarly, a prosecutor may provide a reason that is in fact race-neutral, but that upon further examination is revealed not to be the actual reason that the prosecutor struck the potential juror.[7] It is at the third step that the "persuasiveness of the [race-neutral] justification becomes relevantthe step 793 in which the trial court determines whether the opponent of the strike has carried his burden of proving purposeful discrimination."[8] At the third step, "implausible or fantastic justifications may (and probably will) be found to be pretexts for purposeful discrimination."[9] ¶ 104. The touchstone for the third step of the Batson inquiry is the credibility of the prosecutor: Does the circuit court believe that the prosecutor's race-neutral 794 explanation is genuine?[10] As the U.S. Supreme Court has made clear, in many cases, the "best evidence often will be the demeanor of the attorney who exercises the challenge."[11] ¶ 105. That said, however, an attorney's demeanor is far from the only evidence that a circuit court is obligated to consider under Batson's third step.[12] "A prosecutor's motive may be inferred from the totality of the relevant facts."[13] ¶ 106. The third step of the Batson analysis therefore imposes a "duty"[14] on the circuit court to consider the "totality of the circumstances" surrounding jury selection in a given case.[15] A circuit court faced with a 795 Batson challenge is charged with examining the "entire res gestae" of the jury selection process;[16] when determining whether a prosecutor acted with purposeful discrimination, a circuit court must undertake a "detailed analysis" of "all of the evidence."[17] As the Seventh Circuit has explained, "One way or another, a trial court must consider all relevant circumstances before it issues a final ruling on a defendant's [Batson] motion."[18] 796 ¶ 107. Moreover, a circuit court's examination of the totality of the circumstances should include, whenever possible, an evaluation of "the differential manner in which the State" interacted with minority and non-minority jurors, since the "crucial and determinative inquiry" in a Batson claim is whether similarly situated venirepersons have been treated differently based upon race.[19] For example, in its most recent decision discussing Batson, the United States Supreme Court identified disparate questioning by a prosecutor, that is, a prosecutor's altering the way a question asked of all venire members is asked of African-American venire members, as "evidence of purposeful discrimination" when a defendant raises a Batson claim.[20] 797 ¶ 108. In short, under step three, the circuit court had a duty to examine all the relevant facts and the totality of the circumstances surrounding jury selection before making an express determination as to whether the defendant has satisfied the burden of proving discrimination. The demeanor of the prosecutor when announcing race-neutral reasons for exercising a peremptory strike is merely one piece of evidence for the circuit court to consider. II ¶ 109. In the present case, there is no evidence in the record that the circuit court fulfilled its step three duty under Batson.[21] In a single, conclusory sentence the circuit court ruled, "Well, I think the State has made 798 its case and it does have just cause for the strike." It made no findings of fact and reached no conclusions of law relevant to the Batson inquiry; it made "no effort to comply with the letter, much less the spirit, of Batson."[22] ¶ 110. When the circuit court concluded that the State "made its case," did it mean that the State provided race-neutral reasons? If so, which reasons provided by the State were race-neutral? Were any of them credible? When the circuit court concluded that the State had "just cause for the strike," did it mean that the State did not act with purposeful discrimination? "The limited record developed in the present case casts doubt on the trial court's ability to make the required finding regarding the prosecutor's intent, thereby undermining the deference due its conclusion."[23] Thus the decision in the present case cannot be properly reviewed and the case must be remanded.[24] 799 ¶ 111. Nothing in the circuit court's determination demonstrates that the circuit court looked beyond the State's proffered reasons in "making its case" and nothing demonstrates that the court considered the totality of the circumstances, all the relevant facts, or the entire res gestae of the jury selection process.[25] The U.S. Supreme Court has held that a trial court need not make detailed findings addressing all the evidence before it, but Batson does require that a trial judge make an "ultimate determination on the issue of discriminatory intent"[26] and that the court adequately 800 consider all of the relevant information and the totality of the circumstances.[27] The circuit court in the present case did not fulfill its duty under the third step of Batson, and a circuit court commits error when it denies a Batson motion without making the proper step three determination.[28] This error undermines the deference due the circuit court. ¶ 112. Furthermore, the majority opinion here fails in its duty to review the decision of the circuit court. The majority is correct that under Hernandez v. New York, 500 U.S. 352, 364 (1991), a circuit court's determination whether a prosecutor intended to discriminate on the basis of race in challenging a prospective juror is a question of historical fact that is entitled to deference. In Miller-El v. Cockrell, 537 U.S. 322 (2003), however, the U.S. Supreme Court explained, "deference does not imply abandonment or abdication of judicial review. Deference does not by definition 801 preclude relief."[29] Furthermore, the Miller-El Court emphasized that appellate review includes a search for "any evidence demonstrating that, despite the neutral explanation of the prosecution, the peremptory strikes in the final analysis were race based."[30] ¶ 113. As discussed above, the majority opinion's review of the circuit court's step three analysis in this case is actually an examination of the circuit court's step two analysis. Instead of analyzing whether the circuit court erroneously determined that the State did not violate the equal protection clause of the Constitution when it struck Bell from the venire, the majority opinion explains that the defendant's prima facie case was rebutted when "the State offered several race-neutral reasons for exercising her peremptory challenge against Bell."[31] And, instead of reviewing all of the relevant circumstances in the record that might bear on the final analysis of whether the peremptory strike of Bell was race based, the majority examines only the extent to which each of the prosecutor's proffered reasons, in a vacuum, was properly considered race-neutral.[32]802 It did not, as Miller-El requires, search for any evidence that the peremptory strike in the final analysis was race-based. ¶ 114. The majority also errs when it focuses exclusively on the circuit court's assessment of the prosecutor's subjective state of mind when offering race-neutral explanations for her strike. The burden in a Batson challenge is on the defendant, and ultimately it is the objective evidence in the record that must persuade the circuit court that a race-neutral reason is either pretextual or disingenuous. "Frequently the most probative evidence of intent will be objective evidence of what actually happened;"[33] an explanation that is contrary to the objective facts is a sure sign of disingenuousness or pretext. Only by balancing the prosecutor's expressed subjective intent against the totality of the relevant objective evidence can a circuit court make its step three determination. ¶ 115. In sum, the circuit court did not look beyond the State's proffered reasons. It did not consider the totality of the circumstances. It made no findings of 803 fact and made no ultimate determination on the issue of discriminatory intent. The circuit court's conclusory statement, "Well, I think the State has made its case and it does have just cause for the strike," is thus not entitled to the deference usually accorded step three Batson findings. The majority opinion, inappropriately focusing on step two of the Batson analysis, completely misses the point. III ¶ 116. A close examination of the recordan examination that includes consideration of the totality of the circumstancesreveals some disturbing information about jury selection in the present case. In short, there are glaring signs in the record that Bell, the lone African-American juror on the venire, was singled out and treated differently than all other jurors, in part because of his race. Consequently, had the circuit court engaged in the inquiry demanded by Batson, it might have reached a different conclusion. ¶ 117. The State admits that the day before jury selection in the present case, it requested a report from the Beloit Police Department listing police contacts at Bell's address. There is no suggestion or indication that the prosecutor made a similar request for any other member of the venire. We do know, however, that it is not standard practice for Rock County assistant district attorneys to run police checks on the addresses of potential jurors.[34] 804 ¶ 118. More importantly, by virtue of this police report, Bell became the only member of the venire for whom silence during voir dire created grounds for being struck due to lack of candor.[35] The prosecutor asked a handful of questions during voir dire to uncover whether any of the venire members should be struck for cause or through her peremptory strikes. All of the questions were designed so that affirmative answers raised concerns and a venire member's silence meant that the prosecutor should not be concerned.[36] For Bell, however, the exact opposite was true. The police report gave the prosecutor additional information about Bell that permitted her to construe his silence as "not being completely honest."[37] 805 ¶ 119. This case, therefore, is a classic case of disparate questioning with a slight twist. The prosecutor altered the way she would perceive the answers given by Bell as opposed to the way she would perceive the same answers from all other venire members. Indeed, Bell, like more than half of the venire members, sat silently through the prosecutor's questions, but he 806 was the only silent venire member who was peremptorily struck by the prosecutor.[38] ¶ 120. The circuit court did not pay any attention to this information before it. The circuit court never considered that the prosecutor had not obtained police reports for any of the other venire members or any of the other listed addresses for the venire members.[39] The circuit court never considered whether there was reason to infer a lack of candor or dishonesty from the silence of any of the other eleven silent venire members.[40] Neither does the majority opinion. In fact, the majority opinion commends the prosecutor, without flinching, for relying on the police report.[41] 807 ¶ 121. The heart of the Batson inquiry in this case, in my opinion, is the role that race played in the prosecutor's decision to seek out a police report for Bell and not for any other member of the venire. Why was Bell not treated the same as other venire members?[42] ¶ 122. The record makes clear that the prosecutor was well aware of Bell's race in advance of voir dire. Any citizen who is placed on a venire in Wisconsin must fill out a juror questionnaire. The juror questionnaire is required by law to include the race of the prospective juror as well as the address and occupation of each person.[43] The logical inference to be drawn from the record is that the prosecutor here had access to information 808 from this questionnaire, for she knew both that Bell would be in the venire and what his address was when she requested the police report the day before jury selection.[44] ¶ 123. In addition, the prosecutor anticipated that her peremptory strikes were going to be challenged and made arrangements before jury selection to have the challenge addressed outside of the presence of the venire. Prior to jury selection, when all parties were in chambers, the prosecutor made a special request that "if there is any objection to strikes of either party we either do it at the bench or in chambers." The court then clarified, "[Y]ou mean your peremptories?" The prosecutor responded, "Yes." ¶ 124. The prosecutor gave some indication of why she obtained the police report for Bell. In response to the circuit court's inquiry into whether she had a reason for striking Bell, the prosecutor responded: Yes, your honor. As the court is probably well aware, our office as well as the federal prosecutor, has prosecuted a number of Bells who live in Beloit throughout the years. It's well known as a criminal name in Beloit. I would also note that he lives at 1216 Wisconsin 809 Avenue which is a high crime area in Beloit. Um, I also yesterday had the Beloit Police Department run information on the 1216 Wisconsin address. The inference to be drawn is that the prosecutor saw the name "Bell" and noted where he lived.[45] ¶ 125. On its face, this would be a race-neutral explanation. Yet it is not so clear that race is uninvolved. Would the prosecutor have run a police check on Bell if his juror questionnaire identified him as Asian, Latino, or Caucasian? Familial relationship to people involved in the criminal justice system alone may not be the linchpin here. ¶ 126. For example, the record also reveals that one of the members of the venire was a man with the last name Gregory. The prosecutor's office in Beloit was prosecuting a man named Gregory at the same time that the defendant here was being prosecuted.[46] The likelihood of a relationship between the two people named Gregory was greater than the likelihood of a relationship between Bell and the criminal Bell family since the telephone directory lists 14 people named Gregory but 54 named Bell.[47] Both venire member Bell 810 and the criminal Bells are African-American; the venire member Gregory, however, is not African-American, while the Gregory who was prosecuted is African-American. The prosecutor thus made the assumption of familial relation based on race, not just name. Yet numerous families have members of different races, including those of three of the seven justices on this court (my own included), as well as that of the governor of the state. ¶ 127. The circuit court did not engage in the inquiry required under step three of Batson and, as a result, the circuit court never noticed that Bell was treated differently than all other jurors on the venire and it never noticed the role that race played in the prosecutor's decision to treat Bell differently. As has been shown, a reasonable inference can be drawn from the totality of the circumstances in the present case that there was disparate treatment of venire member Bell based on race. V ¶ 128. The ultimate burden of proving discrimination in a Batson challenge rests with the defendant. The defendant in the present case did not raise many of the above arguments during the Batson hearing, making it difficult to conclude here that the circuit court's decision to uphold the peremptory strike of Bell is clearly erroneous. Nevertheless, the circuit court has a duty to explore all of the relevant facts and make a finding about discrimination. "Batson requires a trial judge to ensure that a defendant on trial is afforded the equal protection of the law."[48] The circuit court here 811 failed to meaningfully take on this duty. Moreover, the majority has neglected to enforce this duty. ¶ 129. Under similar circumstances, appellate courts remand the matter to the trial court.[49] I would remand this case to the circuit court to conduct a new hearing and engage in the analysis required at the third step of the Batson inquiry, including consideration of such matters as whether the prosecutor ran police checks on the addresses of any other potential jurors; whether any other potential jurors shared a name with an individual prosecuted by the Beloit District Attorney's office; and whether any other potential jurors indicated that they were unemployed or that their employment varied. If the circuit court determines, after the hearing, that there was no purposeful discrimination based on race, the conviction should be affirmed. If it determines that there was purposeful discrimination, the required remedy would be a reversal of the conviction and a new trial. ¶ 130. For the foregoing reasons, I dissent. ¶ 131. ANN WALSH BRADLEY, J. (dissenting). For the reasons set forth in Parts I and II of Chief Justice Abrahamson's dissent, I agree that the majority's Batson analysis is flawed and that it erroneously concludes that the third step of Batson was satisfied in this case. I therefore join those parts of that dissent. I write separately, however, because I disagree with portions of the analysis in Parts III and IV of her dissent. ¶ 132. The majority correctly states that "this case concerns the third step of the Batson test." Majority op., ¶ 73. It also correctly notes that, under the 812 third step of Batson, the circuit court "has the duty to weigh the credibility of the testimony and determine whether purposeful discrimination has been established." Majority op., ¶ 32. However, the majority's analysis essentially treats this duty as nonexistent and seems to indicate that the circuit court's role can be limited to determining that the reasons proffered by the prosecutor are race neutral. ¶ 133. The majority ignores the circuit court's proper role by focusing its step three analysis on confirming that the State advanced race neutral reasons, which is step two of Batson. The Chief Justice's dissent characterizes the majority's approach as "conflating the second and third steps of the Batson analysis." Chief Justice Abrahamson's Dissent, ¶ 102. Further, her dissent concludes that, as a result of the conflation, the majority errs "by concluding that the State's satisfaction of step two is sufficient, in and of itself, to defeat a charge of purposeful discrimination." Id. ¶ 134. I agree with these criticisms of the majority's step three analysis. By conflating step three into step two, the majority fundamentally undermines an important part of the process established by Batson to address discrimination in the jury selection process namely, the circuit court's role in evaluating the evidence to determine whether purposeful discrimination has occurred. I therefore agree with the conclusions set forth in Part I of the Chief Justice's dissent. ¶ 135. I also agree that this record is insufficient for us to evaluate whether the circuit court properly engaged in the analysis required by step three of Batson. It is unclear whether the circuit court weighed the credibility of the testimony and made a determination that purposeful discrimination had not been established. 813 The court made no findings of fact. All that is set forth in the record is the court's conclusory statement: "Well, I think the State has made its case and it does have just cause to strike." Even the majority acknowledges that the circuit court did not elaborate on this conclusion. Majority op., ¶ 16. I therefore agree with the conclusions set forth in Part II of the Chief Justice's dissent. ¶ 136. However, I part ways with the Chief Justice with regard to portions of Parts III and IV of her dissent. Batson clearly places a duty on the circuit court to evaluate all evidence presented by the parties that is relevant to whether purposeful discrimination has occurred. However, I am not convinced that Batson requires an independent inquiry by the circuit court to the extent suggested in Part III or that the required analysis is as extensive as set forth in Part IV. ¶ 137. While it is certainly within the circuit court's discretionary authority to take the initiative in developing evidence of discrimination, the court is not required to do so. It is the defendant's, not the circuit court's, burden of persuasion with respect to the issue of purposeful discrimination. See State v. Walker, 154 Wis. 2d 158, 176, 453 N.W.2d 127 (1990). Likewise, I do not think a Batson hearing necessarily requires an inquiry to the extent detailed in the Chief Justice's dissent. ¶ 138. I would remand to the circuit court to engage in the analysis required to satisfy step three of Batson. If the court determined that there was no purposeful discrimination, it would affirm the conviction. If the court determined that there was purposeful discrimination, the proper remedy would be a reversal of the conviction and a new trial. In either event, the 814 circuit court must articulate its analysis on the record. Accordingly, I respectfully dissent. ¶ 139. I am authorized to state that JUSTICE DIANE S. SYKES joins this dissent. NOTES [1] All references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise noted. [2] Bollendorf listed Leeman Jones, Officer Dan Daly, Officer Tom Niman, Officer Bobby Pittman, Lamon's family including Maggie Lamon and Bobbie Lamon a/k/a Bobbie Goode. [3] See Batson v. Kentucky, 476 U.S. 79, 103-05 (1986) (Marshall, J. concurring) for a detailed history of peremptory strikes. [4] "`Discriminatory purpose'...implies more than intent as volition or intent as awareness of consequences. It implies that the decisionmaker... selected ... a particular course of action at least in part `because of not merely `in spite of,' its adverse effects upon an identifiable group." Hernandez v. New York, 500 U.S. 352, 360 (1991) (citing Personnel Adm' of Mass. v. Feeney, 442 U.S. 256, 279 (1979)). [5] A defendant of whatever race is entitled to a jury selected without discrimination. See Powers v. Ohio, 499 U.S. 400 (1991). See also State v. Lopez, 173 Wis. 2d 724, 728, 496 N.W.2d 617 (1992). [6] We recognize that Hernandez addresses federalism issues about review of state court and federal court decisions. While we are not presented with any federalism issues, we nevertheless cite the Hernandez case for the proposition that the appropriate standard of review is clearly erroneous. [7] See also United States v. Terrazas-Carrasco, 861 F.2d 93, 94, 5th Cir. (Tex. 1988)(holding that a "clearly erroneous" or "great deference" standard of review is applied in the federal court when reviewing a Batson challenge) (internal citations omitted). [8] Neither the State, nor Lamon challenges the validity of steps one and two of the Batson test. (Pet'r Br. at 7 and 9). [9] We need not address whether the holding in Gregory negates examining the post-conviction motion findings because the findings of that motion by a different circuit court judge are not necessary in determining the outcome of this case. [10] "However, when attempting to prove the reasons given by the prosecutor were pretextual, the focus must be on what the prosecutor knew about the potential juror when he made the strike (citing Williams v. Chrans, 957 F.2d 487, 491 (7th Cir. 1992)). Therefore, if a defendant is attempting to prove the prosecutor's reasons for the strike were pretextual, a defendant must show either that the prosecutor intentionally misrepresented the facts he said he relied on or that he had been told those facts but he knew they were erroneous." State v. Gregory, 2001 WI App 107, ¶ 14, 244 Wis. 2d 65, 630 N.W.2d 711. [11] These contacts ranged from civil processes to stolen vehicles. The State argued that the Bell in the venire may be related to the people at that address. Moreover, there was a number of police contacts at Bell's address, yet Bell did not answer Bollendorf's question regarding contact with their office or with law enforcement officers. Despite Bell's being listed at the address in Exhibit 1, Bell failed to mention anything about relatives who may have had contacts at his address. [12] The State points out that Lamon does not take issue with steps one and two of the Batson test. [13] Contrary to the hyperbole of the dissent, we do not "ignore[] well-established case law." (Dissent, ¶ 94). Rather, we have applied the relevant case law from the U.S. Supreme Court, the court of appeals, and this court to the facts and issues presented. The dissent would have us strip away the deference due to the circuit court's determinations (Dissent, ¶ 99) as outlined in Hernandez, 500 U.S. at 364, and would, in effect, eliminate the defendant's ultimate burden of persuasion (Dissent, ¶ 128). The burden would be placed on the circuit court, not on the defendant. The dissent has forgotten the importance of peremptory challenges, and how significant such challenges are in furthering the purpose of eliminating extremes of partiality on either side of a case. As noted earlier, the United States Supreme Court has characterized peremptory challenges as "essential to the fairness of trial by jury." Batson, 476 U.S. at 107 (Marshall, J. Concurring)(citing Lewis v. State, 146, U.S. at 376, 13 S.Ct. at 138). [1] Batson v. Kentucky, 476 U.S. 79, 105 (1986) (Marshall, J., concurring). [2] Batson, 476 U.S. at 106 (Marshall, J., concurring) (citations omitted). [3] Batson, 476 U.S. at 91. [4] Majority op., ¶ 91. [5] Id., ¶ 92. [6] The Seventh Circuit, in Coulter v. Gilmore, 155 F.3d 912 (7th Cir. 1998), explained: A facially neutral reason for striking a juror may show discrimination if that reason is invoked only to eliminate African-American prospective jurors and not others who also have that characteristic.... [A] procedure that omits the [step three] totality inquiry would exonerate the user of peremptories in virtually every case, unless the lawyer was foolish enough to announce her discriminatory purpose in so many words. Batson requires more.... Id. at 921 (citations omitted). [7] See, e.g., Turner v. Marshall, 121 F.3d 1248, 1255 (9th Cir. 1997) (refusing to accept a list of neutral reasons at face value where they were unsupported or refuted by record); Davidson v. Harris, 30 F.3d 963, 966 (8th Cir. 1994) (party's justification that African-American juror was likely to be sympathetic to the opposing party because she had young children was pretextual because white jurors with young children were seated on the jury); Jones v. Ryan, 987 F.2d 960, 973 (3d Cir. 1993) (prosecutor's explanation that he struck African-American juror because she had a son the same age as the defendant was pretextual when white jurors with children of the same age were seated). [8] Purkett v. Elem, 514 U.S. 765, 768 (1995). [9] Id. The majority opinion omits the three words "and probably will" when quoting this passage, subtly removing the Supreme Court's emphasis on the likelihood that such fantastic reasons will not be considered sufficient under step three of Batson. See majority op., ¶ 32. Moreover, immediately after the majority opinion quotes this passage, it incorrectly asserts that "in addition to accepting `silly,' `superstitious' justifications for striking a juror, intuitive strikes have been upheld as valid strikes" under step three. Majority op., ¶ 33. The cases the majority relies upon for this proposition, United States v. Terrazas-Carrasco, 861 F.2d 93, 94-95 (5th Cir. 1988), and United States v. Williams, 934 F.2d 847, 850 (7th Cir. 1991), are not cases involving a Batson step three analysis. In Williams, for example, the Seventh Circuit held only that "intuitive assumptions that are not fairly quantifiable" are valid race-neutral reasons that a prosecutor may offer for excluding a juror at stage two, not that they are valid under step three. Williams, 934 F.2d at 850. No Batson violation occurred in Williams because the district court "considered [the prosecutor's] explanation in light of of the circumstances of that particular case and concluded that the explanation was credible"the stage three analysis. Id. Thus, Williams does not stand for the proposition that silly, superstitious, or intuitive race-neutral reasons for a peremptory strike are constitutionally valid. Rather, Williams stands for the proposition that such explanations satisfy the State's burden to provide a race-neutral reason at step two of the Batson analysis. [10] Hernandez v. New York, 500 U.S. 352, 365 (1991). [11] Id. [12] In State v. Walker, 154 Wis. 2d 158, 173-75, 453 N.W.2d 127 (1990), this court concluded that a court's duty to analyze "all relevant circumstances" includes consideration of: [W]hether the prosecution has eliminated all members of the defendant's race from the panel of prospective jurors; whether the race of the defendant or his or her witnesses is different than the race of the victim or the state's witnesses; whether the excluded jurors sharing the defendant's race responded to any questions of the judge or the lawyers in a manner that made them suitable candidates for exclusion by the prosecutor; how many venirepersons share defendant's race; and the nature of the crime. [13] McLain v. Prunty, 217 F.3d 1209, 1220 (9th Cir. 2000). [14] Batson, 476 U.S. at 98. [15] United States v. Hill, 146 F.3d 337, 342 (6th Cir. 1998) ("At this [third] step of the analysis, the district court has the responsibility to assess the prosecutor's credibility under all of the pertinent circumstances, and then to weigh the asserted justification against the strength of the defendant's prima facie case under the totality of the circumstances."); United States v. McMillon, 14 F.3d 948, 953 n.4 (4th Cir. 1994) ("If [the step two] burden is met, the court then addresses and evaluates all evidence introduced by each side (including all evidence introduced in the first and second steps) that tends to show that race was or was not the real reason and determines whether the defendant has met his burden of persuasion."); see also State v. Gregory, 2001 WI App 107, 244 Wis. 2d 65, 630 N.W.2d 711 (Vergeront, J., dissenting): [T]he third step in the Batson analysis is not satisfied by a conclusory statement that the prosecutor's explanation is race-neutral. At the third step, the trial court has the duty to determine if the defendant has established purposeful discrimination. The duty of assessing the credibility of the prosecutor's race-neutral reasons embodies the "decisive question" in the Batson analysis, and requires the trial court to consider all the facts and circumstances. Id. ¶ 24 (citations omitted). The majority correctly explains that a circuit court must consider the "totality of the circumstances" when determining whether the State discriminated in the exercise of its peremptory strikes. Majority op., ¶ 80 (quoting Hernandez v. New York, 500 U.S. 352, 363 (1991). The majority errs, however, when it asserts that this duty can be fulfilled "simply." Id. See also United States v. Stavroulakis, 952 F.2d 686, 696 (2d Cir. 1992) (disapproving of a trial court's conducting its review of a Batson application with undue haste and ruling in a summary fashion). [16] United States v. Armstrong, 517 U.S. 456, 467 (1996). [17] Coulter, 155 F.3d at 920. [18] Id. at 921 (citing Batson, 476 U.S. at 96-97). [19] Coulter, 155 F.3d at 921; Turner v. Marshall, 121 F.3d 1248, 1251-52 (9th Cir. 1997) ("A comparative analysis of jurors struck and those remaining is a well-established tool for exploring the possibility that facially race-neutral reasons are a pretext for discrimination."); Doss v. Frontenac, 14 F.3d 1313, 1316-17 (8th Cir. 1994) ("It is well-established that peremptory challenges cannot be lawfully exercised against potential jurors of one race unless potential jurors of another race with comparable characteristics are also challenged."). [20] Miller-El v. Cockrell, 537 U.S. 322, 123 S. Ct. 1029, 1043 (2003). The Court also explained that statistical evidence of the disproportionate number of strikes used against African-American venire members, historical evidence of racial discrimination by a district attorney's office, and the decision to request a "jury shuffle" when a predominate number of African-Americans were seated in the front of the jury panel provided further evidence for a court to consider when determining whether a Batson violation had occurred. Miller-El, 123 S. Ct. at 1043-44. The State, in its brief, asserts that Wisconsin need not adopt a list of factors to be considered during the third step of the Batson analysis, like a number of southern states have done, because Wisconsin does not share the history of institutionalized race discrimination experienced by those jurisdictions. The State points to the recent Wisconsin Public Trust and Confidence in the Justice System Study as evidence of Wisconsin's good record on racial equality, noting that the study "did not identify discriminatory peremptory strikes as a cause for concern or remedial action." (State's Br. at 20). What the State does not mention is that participants in focus groups "said that race and class matter [in the court system]. There is a feeling that it would be difficult, if not impossible, to escape bias in the justice system because bias permeates all levels-law enforcement, attorneys, judges, juries, and corrections officials." Public Trust & Confidence in the Justice System: The Wisconsin Initiative (October 2000), http://www.wisbar.org/bar/ptc/ptcap.html. I do not consider it significant that citizen respondents did not specifically identify "discriminatory peremptory strikes" as a reason, given this general finding. [21] Both the majority opinion and the State's brief acknowledge the ambiguity of the circuit court's ruling. The majority writes: "The circuit court found that Bollendorf had just cause for the peremptory strike, but did not elaborate on its decision. As a result, Bollendorf's peremptory strike was allowed to stand." Majority op., ¶ 16. Similarly, the State noted in its brief, "Before reaching [his] summary conclusion, Judge Dahlberg did not expressly confirm that Assistant District Attorney Bollendorf had proffered race-neutral explanations for striking Bell." (State's Br. at 5). [22] Jordan v. Lefevre, 206 F.3d 196, 201 (2d Cir. 2000). [23] Id. [24] See, e.g., Jordan v. Lefevre, 206 F.3d 196, 201 (2d Cir. 2000) ("[T]he limited record developed in the present case casts doubt on the trial court's ability to make the required finding regarding the prosecutor's intent, thereby undermining the deference due its conclusion."); United States v. Hill, 146 F.3d 337, 342 (6th Cir. 1998) ("Without a fuller indication of the circumstances that apparently led the district court to this conclusion, however, we cannot properly review the decision."). [25] The relationship between a court's "duty" and the opponent of the strike's "burden" under Batson is not unlike the relationship this court has created between a court's "obligation" and the beneficiary of an error's "burden" in harmless error review. It is well established in Wisconsin that the beneficiary of an error during trial has the burden of proving that the error was harmless, that is, that it is true beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained. See State v. Vanmanivong, 2003 WI 41, ¶ 40, 261 Wis. 2d 202, 661 N.W.2d 76 (citing State v. Harvey, 2002 WI 93, ¶¶ 40-41, 254 Wis. 2d 442, 647 N.W.2d 189) (citing State v. Dyess, 124 Wis. 2d 525, 543, 370 N.W.2d 222 (1985))). Yet it is also true that the harmless error rule is an injunction on courts requiring that a court address the harmless error rule regardless of whether the parties do. Harvey, 254 Wis. 2d 442, ¶ 47 n.12 (citing Wis. Stat. § 805.18(2)). Similarly, under Batson, even though the burden of proving purposeful discrimination is on the opponent of the strike, a court has "the duty to determine if the defendant has established purposeful discrimination." Batson, 476 U.S. at 98. Here, the circuit court did not address whether the prosecutor's proffered reasons were pretextual. The circuit court ruled summarily after a brief colloquy and did not properly conduct the third Batson step. [26] United States v. Alvarado, 923 F.2d 253, 256 (2d Cir. 1991). [27] See Riley v. Taylor, 277 F.3d 261, 291 (3d. Cir. 2001) ("Although the state court is not required to comment on all of the evidence before it, an adequate step three Batson analysis requires something more than a terse, abrupt comment that the prosecutor has satisfied Batson."). [28] United States v. Thomas, 320 F.3d 315, 320 (2d Cir. 2003); see also Riley v. Taylor, 277 F.3d 261, 287 (3d Cir. 2001): The state courts in this case rejected Riley's Batson claim without discussing any of the ample evidence that throws into question the explanations offered by the prosecutor for striking two of the black jurors and there is nothing relevant in the record that might otherwise support the state courts' decisions. Thus, we do not know why the state courts found the State's explanation was plausible and credible in light of the other evidence. It is because of the state courts' omission of a requirement under the third step of the Batson inquiryof an ultimate determination on the issue of discriminatory intent based on all the facts and circumstances that the State's argument founders. [29] Miller-El, 123 S. Ct. at 1042 (referring to review in the context of habeas relief under Antiterrorism and Effective Death Penalty Act, where the deference given to trial courts is even greater). [30] Miller-El, 123 S. Ct. at 1042 (referring to examination of a Batson claim in the context of a request for a certificate of appealability); see also Riley v. Taylor, at 286 ("Deference in a Batson case must be viewed in the context of the requirement that the state courts engage in the three-step Batson inquiry."). [31] Majority op., ¶ 79. [32] See majority op., ¶¶ 80-91. Moreover, the majority imputes some of its own conclusions to the circuit court, in an effort to bolster the circuit court's determination. For example, the majority asserts that "[h]ere, the circuit court judge relied on, inter alia, Bell's lack of response to general voir dire questions" and that this silence "appeared to show a lack of candor, when combined with the information in the police report" when determining if the prosecutor's explanations were credible. Majority op., ¶ 56. There is no evidence in the record that the circuit court even noticed that Bell did not respond to any questions asked during voir dire, let alone whether the circuit court drew the conclusion from this silence that Bell was being less than honest. [33] Washington v. Davis, 426 U.S. 229, 253 (1976) (Stevens, J., concurring). [34] In State v. Gregory, 2001 WI App 107, 244 Wis. 2d 65, 630 N.W.2d 711, a Beloit prosecutor struck the very same potential juror, Dondre Bell, the day after he was struck from the venire in the present case. Bell was the lone African-American on that venire as well. The prosecutor justified her strike, in part, because she "had received information from another assistant district attorney that police had responded to 1216 Wisconsin Avenue, Bell's residence, seventeen times between January 1996 and October 1998." Id. at ¶ 9. Clearly it is not a common practice that police checks are made for every juror in every case. [35] More than just creating an avenue for gauging dishonesty, the police report made it possible for the prosecutor to strike Bell regardless of his answers during voir dire. She set him up. Had he answered affirmatively to the question whether he knew somebody who had been convicted of a crime, the prosecutor would have had grounds to use a peremptory strike against him. Had he failed to answer that question, as he did here, the prosecutor could use the police report as grounds for striking him. No other juror was destined to be struck in advance of voir dire as a result of pretrial actions taken by the prosecutor. [36] See majority op., ¶ 10. [37] It is worth explaining that Bell did not, in fact, evidence any dishonesty by his failure to respond. The prosecutor asked three specific questions about crime of the entire venire for which the police report might be used to indicate that Bell's silence was dishonesty. She asked whether (1) anyone had had contact with the prosecutor's office; (2) anyone had a close friend or relative who had been a victim of crime; and (3) anyone had a close friend or relative who had been convicted of a crime. The police report does not indicate that anybody living at Bell's address has ever been arrested, convicted, or prosecuted for a crime. It does not indicate that Bell, the venire member, lived at the address during the time of any of the police contacts. It does not show that Bell, the venire member, is related to anyone involved in the incidents leading to police contact. In fact, the defendant in Gregory, 244 Wis. 2d 65 (Ct. App. 2001) (a case in which Bell, again the lone African-American on the venire, was struck from the venire based on the same police report), submitted a written offer of proof that Bell would testify that he is not related to convicted cocaine dealer Christopher Bell; that he did not live at 1216 Wisconsin Avenue between September, 1995 and May, 1997 because he was attending college in Marshall, Minnesota; that if there were any police contacts at all with 1216 Wisconsin Avenue during that period he was unaware of them; and that he spent a week on jury duty in April, 1999 and was struck from several jury panels. Gregory, Appellant's Br. at 9. Thus, the prosecutor's decision to strike Bell out of a concern that he would be dishonest was, as she admitted during the Batson hearing, merely an assumption, not a decision based on fact. [38] The record reveals that the venire in this case consisted of 20 people and that eleven jurors aside from Bell sat silently through the entire jury selection. Bell was the only juror who sat silently who was struck by the prosecutor. [39] If a police check was run on other jurors as well, what did the police reports indicate? Did any of those jurors have contact with the police that they did not admit during voir dire? [40] The record does not reveal whether any other members of the venire had indicated that they were unemployed or that their employment "varies." See Wylie v. Vaughn, 773 F. Supp. 775, 777 (E.D. Pa. 1991): Because there is a far greater percentage of unemployed minorities than there are unemployed persons in the general population, giving prosecutors carte blanche to strike jurors simply because they are unemployed creates a far smaller pool of potential minority jurors. . . . Peremptory strikes on the basis of unemployment should therefore be considered suspect. [41] Majority op., ¶ 74 ("In this case the record shows that the prosecutor had done research about Bell, which stands in stark contrast to the prosecutor in Walker who struck the only African-American without knowing anything about the juror."). It is worth noting that the circuit court, in its post-conviction order, also commended the prosecutor for doing "her homework on Mr. Bell." The majority does not give any deference to the post-conviction order in this case, contrary to the State's request. I agree that the post-conviction decision is entitled to no deference here as it did not take any new evidence or establish any new facts. [42] At the Batson hearing, the prosecutor stated that she did not ask Bell individual questions about the police report during voir dire because she did "not want to appear as though [she] was singling him out under the circumstances." The circuit court accepted this explanation without hesitation. The majority goes so far as to sympathize with the predicament in which the prosecutor found herselfaccused of discrimination if she did not ask Bell individualized questions and accused of discrimination if she did. Majority op., ¶ 89. What neither the circuit court nor the majority appreciates is that the prosecutor had already singled out Bell when she obtained and used the police report during voir dire. [43] See Wis. Stat. § 756.04(6); Legislative Council Comments, 1991, Wis. Stat. Ann. § 756.04 (West 2001). The questionnaire must also include "information necessary to determine if the person is qualified to serve as a juror in that circuit court" and "the prospective juror's declaration that the responses are true to the best of his or her knowledge," and "may request other information that the court needs to manage the jury system in an efficient manner, including information ordinarily sought during voir dire examination." Wis. Stat. § 756.04(6)(a), (c), (7). [44] See also State v. Tucker, 2003 WI 12, ¶ 45, 259 Wis. 2d 484, 657 N.W.2d 374 (stating that despite restrictions on public access to juror information during jury selection, each party had access to juror questionnaires and therefore the restricted juror information); State v. Britt, 203 Wis. 2d 25, 33, 553 N.W.2d 528 (Ct. App. 1996) (same). During the Batson hearing, the prosecutor also admitted that she knew from Bell's "juror card" that his employment varied. [45] "As study after study has showed, residence, especially in urban centers, can be the most accurate predictor of racemore accurate, indeed, than social class." United States v. Bishop, 959 F.2d 820, 828 (9th Cir. 1992). [46] It is realistic to believe that the prosecutor in this case knew of the prosecution of Gregory since she was in contact with the prosecutor of the Gregory case. Jury selection in the Gregory trial began the day after jury selection in this case, and as mentioned above, Bell was also on the venire in the Gregory case. The prosecutor in this case passed along her police report to the prosecutor in the Gregory case prior to voir dire, which resulted in Bell's being struck for the second day in a row. [47] See SBC Janesville Area Smart Yellow Pages (April 2003). [48] Jordan, 206 F.3d at 201. [49] See State v. Gregory, 2001 WI App 107, ¶ 30, 244 Wis. 2d 65, 630 N.W.2d 711 (Vergeront, J., dissenting); see also Jordan, 206 F.3d at 201; Coulter, 155 F.3d at 922.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1840866/	971 So.2d 1206 (2007) Mark and Nzinga TALBERT v. STATE FARM FIRE AND CASUALTY INSURANCE COMPANY. No. 2007-CA-0211. Court of Appeal of Louisiana, Fourth Circuit. November 14, 2007. 1207 Craig R. Nelson, Nelson Fay, LLC, New Orleans, LA, for Plaintiffs/Appellants. Robert H. Cooper, Robert H. Cooper, Attorney at Law, Mandeville, LA, for Defendant/Appellee. 1208 (Court composed of Chief Judge JOAN BERNARD ARMSTRONG, Judge PATRICIA RIVET MURRAY, Judge DAVID S. GORBATY). DAVID S. GORBATY, Judge. This is an insurance coverage dispute. The parties are State Farm Fire and Casualty Insurance Company ("State Farm") and Mark and Nzinga Talbert ("the Talberts"). The issue presented is whether State Farm properly denied the Talberts' claim for an allegedly stolen automobile based on material misrepresentations in obtaining coverage. From a judgment in favor of State Farm dismissing their claim, the Talberts appeal. For the reasons set forth below, we affirm. STATEMENT OF FACTS AND PROCEDURAL HISTORY On June 16, 2003, Mrs. Talbert's unemployed brother, Merle Offray, donated to Mr. Talbert a 2003 GMC Yukon Denali bearing Vehicle Identification Number ("VIN") 1GKEK63U13J287031. According to Mrs. Talbert, the donation was memorialized in an "Act of Donation of a Movable," which was executed at Mid-City Auto Title in New Orleans before Don Fern, Mid-City's owner and a notary. In connection with the donation, Mr. Offray and Mr. Talbert jointly presented to Mr. Fern two documents: 1) a "Bill of Sale" dated June 2, 2003, which was notarized by an Ohio notary; and 2) an "Ohio Certificate of Title" for the vehicle. The documents represented that Mr. Offray purchased the vehicle from James Mayo on June 2, 2003, for the sum of $28,000.00. From these documents, Mr. Fern prepared the donation and completed the necessary forms allowing Mr. Talbert to be issued a Louisiana certificate of title and registration for the vehicle. Mr. Offray then paid $2,719.00 in cash for the sales taxes and registration fees to Mr. Fern.[1] Immediately after leaving Mid-City's office, Mr. Talbert and Mr. Offray went to the State Farm agency at which the Talberts had insured other vehicles. At the agency, Mr. Talbert presented the documents that he obtained from Mid-City, including the act of donation. Mr. Talbert also presented a 2003 white GMC Yukon Denali that he claimed to be the vehicle described in the documents. At that time, pictures were taken of the vehicle, which show it had a temporary Georgia license plate. Based on Mr. Talberts' representation that he was the sole owner of the vehicle, State Farm added the Yukon Denali to the Talberts' policy. Thereafter, the Talberts paid the insurance premium on the vehicle for the next year. On June 5, 2004, the Talberts reported to the police and to the On-Star Service that the vehicle was stolen from their home in the Florida Housing Project in New Orleans. The On-Star service located a Yukon Denali with VIN 1GKEK63U13J287031 in Florida. However, the vehicle that On-Star located belonged to Ann Treadwell, a Georgia resident, and was pewter in color, not white. The record reflects that Ms. Treadwell purchased the vehicle new from a Georgia dealership, which acquired it directly from the GMC factory. The Talberts made a claim with State Farm for the value of the vehicle. State Farm provided the Talberts with a rental car and proceeded to investigate the claim. On November 3, 2004, the Talberts filed suit against State Farm, seeking to recover the following: 1) proceeds allegedly due them under their policy for the theft of the 1209 vehicle; 2) damages, including rental costs and premiums paid after the date of the theft; and 3) statutory penalties for bad faith refusal to pay the claim as well as attorney's fees under La. R.S. 22:658 and 22:1220. On August 12, 2005, State Farm informed the Talberts by letter of its denial of their claim. State Farm also terminated the rental coverage that was provided during the investigation of the claim.[2] On October 13, 2006, the trial court denied the Talberts' motion to strike or prohibit State Farm from introducing any evidence or argument that the title or insurance obtained on the Yukon Denali was "fraudulent," "obtained through fraud," or was in any way flawed. Rejecting the Talberts' assertion that such evidence was irrelevant and prejudicial, the trial court reasoned that "State Farm's investigation of the claim required it to conduct a title search history of the vehicle. The title search led to the discovery of problems with the title, proof of insurance, and impropriety with the VIN number. State Farm should be allowed to set forth a defense as to its failure to pay plaintiffs' claim." On November 14, 2006, a jury trial commenced in this matter. Mr. and Mrs. Talbert both testified. The gist of their testimony was that although Mr. Offray was unemployed, they did not question how he could afford the vehicle because they trusted him. Insofar as Mr. Offray's whereabouts, they indicated that he had lived with his mother in New Orleans. They further indicated that they were unaware of where he was currently living. Neither of the Talberts offered any explanation for the discrepancies regarding Mr. Offray's Ohio title, his proof of insurance, or the VIN. More specifically, Mrs. Talbert could not explain why her brother, who never lived in Georgia, would have obtained insurance for the Yukon Denali from a Georgia insurance agency. Nor could she explain why the vehicle, which was transferred by a bill of sale that was notarized by an Ohio notary, and which had an Ohio title, would have a Georgia temporary license plate. The Talberts presented the deposition testimony of Valencia Thomas. Ms. Thomas testified that she was employed by the State Farm agency at which the Talberts purchased the insurance. Ms. Thomas stated that when Mr. Talbert came into the agency to add the Yukon Denali to his existing policy she was training a new employee. Ms. Thomas testified that she and the new employee used the information on the documents Mr. Talbert provided them to complete the application. Although she indicated that they obtained the VIN from those documents, she testified that they are required to physically check the VIN on the vehicle, and that she actually did so. She further testified that they took pictures of the vehicle. She described the vehicle as a white Yukon Denali. Given the documents provided by Mr. Talbert, including the act of donation, Ms. Thomas stated that she was satisfied that he was the owner of the vehicle. The Talberts also presented the testimony of Richard Rushton, who was qualified as an expert in the field of automobile appraisal. Mr. Rushton opined that the value of the Yukon Denali in June of 2004, when the vehicle was stolen, was $37,300.00. At the close of the Talberts' case, the trial court granted State Farm's motion for directed verdict on the issue of statutory penalties and attorney's fees. As a result, the trial court found that the Talberts' 1210 claim did not meet the $50,000.00 jury trial threshold. Thus, the jury was released. On November 15, 2006, the trial court heard State Farm's evidence regarding the Talberts' remaining claim as to the value of the vehicle. State Farm presented Ms. Treadwell as a witness. She testified that on August 4, 2003, she purchased a Yukon Denali bearing the VIN indicated on the Talberts' policy from a dealership in Decatur, Georgia for $43,804.15. She also presented her vehicle for inspection at trial. The trial court examined the vehicle and determined that the VIN on that vehicle matched the VIN on Ms. Treadwell's Georgia title. The trial court also determined that the keys that the Talberts provided to State Farm for their vehicle did not turn on the ignition of Ms. Treadwell's vehicle. State Farm also introduced at trial the deposition testimony of Yvette Worthington, the president of the Georgia dealership from which Ms. Treadwell purchased her vehicle. Ms. Worthington identified the certificate of origin, which established that the 2003 Yukon Denali with VIN 1GKEK63U13J287031 was shipped from the GMC factory to the dealership on April 28, 2003. She also corroborated Ms. Treadwell's testimony that she purchased the vehicle from the dealership on August 4, 2003. At trial, State Farm presented evidence establishing the questionable nature of the documentation that Mr. Talbert and Mr. Offray presented to Mr. Fearn at Mid-City in order to obtain the act of donation and the Louisiana registration documents. First, State Farm presented the deposition of Mr. Mayo, a retired bishop of the AME Church who, according to the bill of sale and Ohio title, sold the Yukon Denali to Mr. Offray. Mr. Mayo denied ever owning a Yukon Denali. Mr. Mayo also denied knowing Mr. Offray. Furthermore, Mr. Mayo testified that it was not his signature on either the bill of sale or the Ohio title. Second, State Farm presented the deposition testimony of Patrick Lightfoot, the Assistant Chief of Investigations for the Ohio Bureau of Motor Vehicles. Mr. Lightfoot testified that he accessed the Bureau's automated title processing system and determined that there was no record of the State of Ohio ever issuing a title in the number referenced on the Ohio certificate of title. He also testified that there was no record of the State of Ohio ever issuing a title for VIN 1GKEK63U13J287031. Mr. Lightfoot further testified that there were a number of discrepancies on the Ohio title that he had not seen on regularly issued Ohio titles. Third, State Farm presented the deposition testimony of Allison Thompson, the regional operations manager for Southern General Insurance Company. Ms. Thompson was asked about Southern General's alleged coverage for Mr. Offray on the Yukon Denali from June 10, 2003 to December 10, 2003. More particularly, she was asked about a Georgia Liability Insurance Card that Advantage Insurance Agency allegedly issued to Mr. Offray reflecting such coverage. Ms. Thompson testified that this card did not resemble the proof of insurance cards that Southern General issues. She further testified that she researched Southern General's database and determined that no policy of insurance was written for Mr. Offray or a vehicle with VIN 1GKEK63U13J287031. Finally, State Farm presented the deposition testimony of Mr. Offray's (and Mrs. Talbert's) mother, Mary Offray. Mrs. Offray testified that she had not had contact with Mr. Offray since he turned eighteen years old, which was several years before 1211 the donation was made. Although Mrs. Offray lived close by the Talberts from the time of the donation to the time of the alleged theft, she testified that she was neither shown the Yukon Denali nor told about the donation.[3] On December 11, 2006, the trial court rendered judgment in favor of State Farm, dismissing the Talberts' claim with prejudice at their cost. In its reasons for judgment, the trial court stated: The plaintiffs [the Talberts] claim that Mrs. Talbert's brother, Merle Offray, gave them a 2003 Yukon Denali. Mr. Offray, who never held a job except as a dishwasher, could not be found to testify to explain how he was able to be so generous. The plaintiffs insured the donated vehicle with State Farm. A year later, they claim that the vehicle was stolen. Interestingly, this was the third time that they have filed a claim for a stolen vehicle. They filed a claim with State Farm which was denied. This lawsuit was then filed. For all of the reasons argued by State Farm, the Court has dismissed the Talberts' lawsuit. This Court found the testimony of Mr. and Mrs. Talbert to be unworthy of belief. This appeal followed. DISCUSSION On appeal, the Talberts assert the following three assignments of error: 1. The trial court erred in granting defendant's motion for a directed verdict dismissing plaintiffs' claims for arbitrary and capricious conduct and failure to negotiate in good faith. 2. The trial court erred in dismissing the jury after plaintiffs rested and conducting a bench trial during defendant's case. 3. The trial court erred in failing to follow Louisiana law and find plaintiffs had an insurable interest in the stolen vehicle and failure to find any misrepresentation with intent to deceive by plaintiffs in order to void State Farm's obligation under the policy. We separately address each of these issues. 1. Directed Verdict: In a jury trial, a party may move for directed verdict at the close of an opponent's evidence. La. C.C.P. art. 1810. The standard of review on appeal of a directed verdict is whether reasonable persons could reach a contrary verdict under the evidence. Thomas v. A.P. Green Industries, Inc., 05-1064, p. 19 (La.App. 4 Cir. 5/31/06), 933 So.2d 843, 858; Davis v. Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, 03-2219, pp. 7-8 (La.App. 4 Cir. 11/17/04), 887 So.2d 722, 727. As noted, the trial court granted State Farm's motion for directed verdict on the issue of statutory penalties under La. R.S. 22:658 and 22:1220. The prohibited conduct under these two statutes is virtually identical: "the failure to timely pay a claim after receiving satisfactory proof of loss when that failure to pay is arbitrary, capricious, or without probable cause." Reed v. State Farm Mutual Automobile Ins. Co., 03-0107, p. 12 (La.10/21/03), 857 So.2d 1012, 1020 (citing Calogero v. Safeway Ins. Co. of Louisiana, 99-1625, p. 7 (La.1/19/00), 753 So.2d 170, 174).[4] Because these two statutes are penal in nature, 1212 they are strictly construed. Reed, 03-0107 at pp. 12-13, 857 So.2d at 1020 (citing Hart v. Allstate Insurance Company, 437 So.2d 823, 827 (La.1983)). The claimant seeking to recover under these two statutes has the burden of establishing three things: 1) the insurer received a satisfactory proof of loss; 2) the insurer failed to pay the claim within the applicable statutory period; and 3) the insurer's failure to pay was arbitrary and capricious. Boudreaux v. State Farm Mutual Automobile Ins. Co., 04-1339, p. 4 (La.App. 4 Cir. 2/2/05), 896 So.2d 230, 233; Sterling v. U.S. Agencies Casualty Co., 01-2360, p. 6 (La.App. 4 Cir. 5/15/02), 818 So.2d 1053, 1057. When "there is a reasonable and legitimate question as to the extent and causation of a claim, bad faith should not be inferred from an insurer's failure to pay within the statutory time limits." Reed, 03-0107 at p. 13, 857 So.2d at 1021 (citing Block v. St. Paul Fire & Marine Ins. Co., 32,306, p. 7 (La.App. 2 Cir. 9/22/99), 742 So.2d 746, 751); Boudreaux, supra. A trial court's determination that an insurer's handling of a claim was not arbitrary, capricious, or without probable cause is a factual finding that may not be disturbed on appeal absent manifest error. Reed, 03-0107 at p. 14, 857 So.2d at 1021 (citing Scott v. Insurance Co. of North America, 485 So.2d 50, 52 (La.1986)). In this case, State Farm had information that gave it cause to make a reasonable investigation into the title of the vehicle. State Farm's investigation revealed discrepancies as to the title, proof of insurance, and the VIN. Given these findings, which the Talberts were unable to explain, we find no error in the trial court's finding that State Farm was not arbitrary or capricious in handling the Talberts' claim. The trial court thus did not err in granting a directed verdict as to statutory penalties. 2. Bench Trial: The Talberts contend that because the case began as a jury trial, it was an abuse of discretion for the trial court to dismiss the jury in the middle of the trial. State Farm counters that the trial court was required to dismiss the jury after it granted the motion for directed verdict because the amount in controversy was then reduced to $37,300.00, the value of the vehicle as established by the Talberts' expert. We agree. A jury trial is not available "where no individual petitioner's cause of action exceeds fifty thousand dollars exclusive of interests and costs." La. C.C.P. art. 1732(1). The Talberts cite no authority, nor do we find any authority, for the proposition that a trial court cannot dismiss a jury once the amount in controversy is reduced below the jury trial threshold. Accordingly, we find no error in the trial court's decision to dismiss the jury. 3. Material Misrepresentation/Intent to Deceive: The jurisprudence of Louisiana is clear that an insurer must meet a three-tiered burden of proof in an action for denial of coverage for misrepresentation. First, it must be shown that the applicant's statements were false. Second, the insurer must establish that the misrepresentations were made with an actual intent to deceive. Third, the insurer must establish that these misstatements materially affected the risk assumed by the insurer. Deutschmann v. Rosiere, 02-2002, p. 4 (La.App. 4 Cir.4/9/03), 844 So.2d 1082, 1085. (citing Johnson v. Occidental Life Ins. of Cal., 368 So.2d 1032 (La.1979)). 1213 The burden of proof on the insurer, as set forth above, is predicated on La. R.S. 22:619, which provides: A. Except as provided in Subsection B of this Section and R.S. 22:692, and R.S. 22:692.1, no oral or written misrepresentation or warranty made in the negotiation of an insurance contract, by the insured or in his behalf, shall be deemed material or defeat or void the contract or prevent it attaching, unless the misrepresentation or warranty is made with the intent to deceive. B. In any application for life or health and accident insurance made in writing by the insured, all statements therein made by the insured shall, in the absence of fraud, be deemed representations and not warranties. The falsity of any such statement shall not bar the right to recovery under the contract unless such false statement was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the insurer. In this regard, the Louisiana Supreme Court in Cousin v. Page, 372 So.2d 1231, 1233 (La.1979), noted that the insurer has the burden of proving misrepresentation and the intent to deceive, but explained: The courts of appeal in interpreting a similar provision in R.S. 22:619B have reasoned that strict proof of fraud is not required to show the applicant's intent to deceive, because of the inherent difficulties in proving intent. Intent to deceive must be determined from surrounding circumstances indicating the insured's knowledge of the falsity of the representations made in the application and his recognition of the materiality of his misrepresentations, or from circumstances which create a reasonable assumption that the insured recognized the materiality. Implicit in the trial court's finding that the Talberts' testimony was "unworthy of belief" is a finding that they made material misrepresentations with the intent to deceive. State Farm contends that finding is supported by the following evidence. First, Mr. Offray, who gave the Talberts the vehicle, was unemployed at the time of the donation and had been unemployed for several years. Second, the Talberts testified that Mr. Offray lived across the street from them with his mother, Mrs. Offray, and denied that he ever lived in Georgia. However, Mr. Offray had a Georgia proof of insurance card and the vehicle he donated to the Talberts had a Georgia temporary license plate. State Farm also cites Mrs. Offray's testimony that she had not seen Mr. Offray for years before the donation and that she was neither told about the donation nor shown the vehicle. In order for the misrepresentations made by the applicant to be found material, they must have affected the risk assumed by the insurer. La. R.S. 22:619 B; Watson v. Life Insurance Company of Louisiana, 335 So.2d 518, 522 (La.App. 1 Cir.1976). "Material" means that the statement must have been of such a nature that, had it been true, the insurer either would not have contracted or would have contracted only at a higher premium rate. West v. Safeway Insurance Co. of Louisiana, 42,028, p. 7 (La.App. 2 Cir. 3/21/07), 954 So.2d 286, 290. In the present case, it is without question that State Farm would not have insured the Yukon Denali had it known that the documents presented and the assertions made regarding ownership and title were false. As to whether the representation, or lack thereof, was made with the intent to deceive, it is evident from the attendant circumstances that the Talberts knew the falsity of the representation as to ownership 1214 of the vehicle, and it is reasonable to assume that they recognized the materiality of this representation. The Talberts' assertion that they did not know Mr. Offray did not have clear title to the vehicle is unsupported by the evidence. It is a well settled principle that an appellate court may not set aside a trial court's finding of fact unless it is clearly wrong. Where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluations and inferences are as reasonable. Rosell v. ESCO, 549 So.2d 840, 844 (La.1989); Harvey v. Cole, 00-1849 (La.App. 4 Cir. 1/23/02), 808 So.2d 771, 776. Moreover, a trial court's finding regarding an insured's intent to deceive is a factual finding governed by the manifest error standard of review. Holt v. Aetna Casualty & Surety Co., 28,450, 28,451, 28,452 (La.App. 2 Cir. 9/3/96), 680 So.2d 117. The record in this case fully supports the trial judge's findings of fact and conclusions. After careful review of the record, we cannot say that the trial judge's evaluations of credibility and her factual finding that State Farm met its burden of proving material misrepresentation with the intent to deceive are clearly wrong or manifestly erroneous. DECREE For the foregoing reasons, the judgment of the trial court is affirmed. AFFIRMED. ARMSTRONG, C.J., concurs. MURRAY, J., dissents with reasons. ARMSTRONG, C.J., concurs. I respectfully concur in the decision to affirm the judgment of the trial court. MURRAY, J., dissents with reasons. I respectfully dissent. I cannot agree that the record supports the trial court's determination that the Talbert's made a material misrepresentation with the intent to deceive State Farm. The misrepresentation apparently is that the VIN number on the documentation that Mr. Talbert presented to State Farm when he insured the vehicle could not have been correct as that VIN number later was determined to be on another vehicle. However, there is no evidence that Mr. Talbert was aware that the information he provided to State Farm was not accurate. All of the documentation that Mr. Talbert had in his possession showed the VIN number that he gave to State Farm. Mr. Offray provided Mr. Talbert with an Ohio title to a white Yukon Denali bearing the VIN number that later proved to be incorrect. There was nothing about the title that would have alerted Mr. Talbert to the fact that the information contained thereon, specifically the VIN number, was not correct. In fact, Mr. Lightfoot, the Assistant Chief of Investigations for the Ohio Bureau of Motor Vehicles, could not opine that the title was invalid. Nether Mr. Fearn nor the employees at the State Farm agency saw anything that caused them to question the validity of Mr. Talbert's documentation of ownership or the accuracy of the VIN number. Apparently, no one checked the VIN number on the white Yukon Denali that Mr. Talbert insured, and for which he paid premiums for over a year before it was stolen. While it appears that Mr. Offray did not, in fact, purchase the vehicle that he donated to the Talberts, there was no evidence presented that either Mr. or Mrs. Talbert was aware of that fact. The trial court and the majority opine that the Talberts should have questioned Mr. Offray about *1215 how he could have afforded the vehicle he was giving them or why the vehicle had a Georgia temporary tag and why he had a Georgia insurance card. In hindsight, with all the information that has come to light since the donated vehicle was stolen, it would have been prudent of the Talberts to question Mr. Offray. Their failure to do so, however, does not establish that they were aware that the VIN number did not match the vehicle they insured. There is absolutely no evidence that the Talberts did anything other than rely on the Ohio title that Mr. Offray presented. Because the record does not support the conclusion that the Talberts made a material misrepresentation with the intent to deceive State Farm in obtaining coverage for the vehicle that was donated to them, I would reverse the trial court and find that the Talberts are entitled to recover $37,300, the value of the stolen vehicle at the time of the theft, from State Farm. NOTES [1] According to the Talberts, Mr. Offray also spent an additional $3,000.00 installing an alarm system and stereo in the vehicle prior to the donation. [2] State Farm paid $10,342.45 in rental car costs for the Talberts. [3] Mrs. Talbert acknowledged that she never told her mother about the donation. [4] The primary difference between these two statutes is the different time periods allowed for payment thirty days under La. R.S. 22:658 and sixty days under La. R.S. 22:1220.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1878050/	391 B.R. 317 (2008) In re Stephen Douglas ROGERS, Julie Kelly Rogers, Debtors. Stephen Douglas Rogers, Julie Kelly Rogers, Plaintiffs v. B-Real, L.L.C., Defendant. Bankruptcy No. 07-11293. Adversary No. 08-1011. United States Bankruptcy Court, M.D. Louisiana. July 21, 2008. 319 J. David Andress, Baton Rouge, LA, for Debtors. Ashley S. Burch, McNew, King, Mills, Burch & Landry, LLP, Monroe, LA, for Defendant. MEMORANDUM OPINION DOUGLAS D. DODD, Bankruptcy Judge. Debtors Stephen and Julie Rogers sued B-Real, L.L.C. ("B-Real") to recover damages resulting from B-Real's filing of three time-barred proofs of claim. B-Real moved to dismiss the complaint for failure to state a claim upon which relief can be granted. The complaint's second, fourth, and sixth claims for relief, and the damages requests in the first and third claims, fail to state a claim as a matter of law and will be dismissed. B-Real's motion to dismiss other claims in the complaint will be denied because those claims allege sufficient facts to state a claim for relief. Facts The debtors filed a chapter 13 petition on September 18, 2007, and the court confirmed their plan on February 19, 2008. On January 14, 2008, defendant B-Real, L.L.C. ("B-Real") filed three proofs of claim as assignee of NCO Portfolio Management, Inc. ("NCO") (claim numbers 16, 17 and 18) for $145.00, $121.80 and $130.00, respectively. The original claimants were Sterling ER Physicians ("Sterling") (claims 16 and 17) and Arkansas EM-1 Gatewood ER Services ("Arkansas EM") (claim 18). No proof of the assignment of the claims to NCO, or thereafter to Real, accompanies any of the claims. The debtors' schedule F lists several debts for medical expenses, none of them to NCO, Sterling or Arkansas EM. The debtors did not object to claims 16, 17 or 18. Rather, on January 29, 2008, they filed the complaint initiating this proceeding. The plaintiffs allege among other facts that B-Real's proofs of claim are not supported by proper documentation and in any event are prescribed under Louisiana law.[1] The debtors further contend that B-Real, 320 an experienced debt collector, engages in a pattern and practice of filing proofs of claim for time-barred debts. They point to eleven other bankruptcy cases in this court in which B-Real's claims were either disallowed or withdrawn upon the request of debtors' counsel. Allegations of Complaint The first claim for relief in the debtors' complaint seeks disallowance of claims 16, 17 and 18 as prescribed, and seeks damages from B-Real under 11 U.S.C. § 105 for the filing the claims. The complaint's second claim for relief is for damages under Bankruptcy Code section 105 for B-Real's allegedly intentional failure to attach supporting documentation to any of the three claims, as Fed. R. Bankr.P. 3001 requires. The third claim for relief again seeks disallowance of claims 16, 17 and 18 as prescribed, but also seeks judgment barring B-Real from amending the proofs of claim. It also prays for cancellation and discharge of the underlying debts, "whether or not the debtor receives a[sic] Order of Discharge in the chapter 13 case." Complaint, 1137. In fourth claim for relief of the complaint, the debtors seek damages under 11 U.S.C. § 362 for B-Real's filing of the claims. The fifth claim for relief seeks damages for alleged violations of the Fair Debt Collection Practices Act ("FDCPA"), specifically 15 U.S.C. §§ 1692d, 1692e and 1692f.[2] Plaintiffs contend that B-Real used false, deceptive, misleading, unfair and unconscionable means to collect a debt and that its actions constituted harassment and abuse. The sixth claim for relief seeks damages for the same conduct under the Louisiana Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), La. R.S. 51:1401 et seq. Finally, the debtors' prayer for relief includes a request that the court order Real to show cause why the filing of claims 16, 17 and 18 did not violate Fed. R. Bankr.P. 9011. Motion to Dismiss B-Real moved to dismiss the debtors' complaint under Fed. R. Bankr.P. 7012(b)(6). It argues that: (1) The debtors lack standing because the proper procedure for seeking relief was objecting to B-Real's claims under Fed. R. Bankr.P. 3007; (2) B-Real's failure to comply with Fed. R. Bankr.P. 3001(c) means only that the claims are not entitled to prima facie validity, and therefore may be disallowed if appropriate under 11 U.S.C. § 502(b)(1)(9); (3) The sole remedy under Louisiana law for filing a time-barred claim is dismissal of the claim (presumably meaning its disallowance in a bankruptcy), and that the debtors are not entitled to recover damages; (4) Merely filing a proof of claim cannot be a violation of the automatic stay because Bankruptcy Code § 501 specifically provides for filing claims; 321 (5) The FDCPA does not apply to the proof of claim process; and (6) The United States Bankruptcy Code preempts state law, and therefore Louisiana consumer protection laws do not apply to the filing of a proof of claim in bankruptcy court.[3] The court may not dismiss a complaint under Bankruptcy Rule 7012(b)(6) "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, 45-6, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). It accepts the well-pled allegations of the complaint as true and views them in the light most favorable to the plaintiff. Kane Enterprises v. MacGregor (USA) Inc., 322 F.3d 371, 374 (5th Cir.2008); Ramming v. United States, 281 F.3d 158, 161 (5th Cir.2001). 1. Adversary Process and Standing a. Plaintiffs Properly Initiated an Adversary Proceeding B-Real cites Fed. R. Bankr.P. 3007 in support of its argument that the debtors lack standing to make their claims. Real argues that the proper method for seeking disallowance of claims 16, 17 and 18 was through the claims objection process and not through an adversary proceeding.[4] Rule 3007 specifically states that "[i]f an objection to a claim is joined with a demand for relief of the kind specified in Rule 7001, it becomes an adversary proceeding." The debtors' request for damages in connection with most of the claims in their complaint falls neatly under Rule 3007. See e.g. In re Moi, 381 B.R. 770, 771-72 (Bankr.S.D.Cal.2008) (complaint objecting to claim and seeking contempt damages properly was adversary proceeding); In re Dean, 359 B.R. 218, 222 (Bankr.C.D.Ill.2006) (action seeking damages for violation of automatic stay could be brought as adversary proceeding); In re Irby, 321 B.R. 468, 470-71 (Bankr. N.D.Ohio 2005) (debtor's claims for injunctive relief and punitive damages dismissed without prejudice, to be refiled as adversary proceeding under Rule 7001). b. Plaintiffs Have Standing B-Real also contends that the plaintiffs lack standing to bring this action. It argues that the debtors have suffered no harm, and therefore have no standing, because under their confirmed plan nothing has been paid yet on the debts represented by unsecured claims 16, 17 and 18. The debtors undeniably have standing to object to B-Real's claims. See Adair v. Sherman, 230 F.3d 890, 894 n. 3 (7th Cir. 2000) (under 11 U.S.C. § 502(a), a party in interest can object to a claim and this includes, "not only the debtor, but anyone who has a legally protected interest that could be affected by a bankruptcy proceeding"). Moreover, as to the plaintiffs' demand for relief under the FDCPA, the FDCPA does not require proof of actual damages as a condition to the recovery of statutory damages. See Keele v. Wexler, 149 F.3d 589, 593-94 (7th Cir.1998), citing 322 Bartlett v. Heibl, 128 F.3d 497, 499 (7th Cir.1997). See also Baker v. G.C. Services Corp., 677 F.2d 775, 781 (9th Cir.1982) ("[Statutory damages are available without proof of actual damages" under the FDCPA). In other words, the FDCPA "is blind when it comes to distinguishing between plaintiffs who have suffered actual damages and those who have not." Keele, 149 F.3d at 593-94. A determination of the plaintiffs' standing to make the other claims is unnecessary because of the court's ruling on those aspects of B-Real's motion. 2. Debtors Have No Private Right of Action under 11 U.S.C. § 105 for a Creditor's Failure to Comply with Bankruptcy Rule 3001 B-Real urges the court to dismiss the complaint's second claim because debtors are not entitled to recover damages when a creditor fails to attach documentation to its proof of claim. B-Real failed to attach to the proofs of claim documentation regarding the underlying debts, as well as evidence of the assignment of the claims to B-Real. The claimant has the initial burden of alleging facts to support a proof of claim. Bankruptcy Rule 3001(a) requires the creditor to file a written statement that sets forth the claim substantially conforming to the form prescribed by the Judicial Conference of the United States, Official Form BIO.[5] For a claim based on writing, Bankruptcy Rule 3001(c) directs the claimant to file with the claim the original or a duplicate of the writing on which the claim is based. A proof of claim executed and filed in accordance with the Bankruptcy Rules, and specifically Rule 3001 (and by implication Official Form B 10), is prima facie evidence of the claim's validity and amount. Fed. R. Bankr.P. 3001(f). Failure to attach supporting documentation to a proof of claim when the bankruptcy rules require it is not grounds for disallowing the claim. Claims may be disallowed solely on grounds set forth in 11 U.S.C. § 502(b). See e.g. In re Kirkland, 379 B.R. 341, 354 (10th Cir. BAP 2007); In re Dove-Nation, 318 B.R. 147, 152 (8th Cir. BAP 2004); In re Kincaid, 388 B.R. 610, 613-14 (Bankr.E.D.Pa.2008); and In re Burkett, 329 B.R. 820, 828 n. 2 (Bankr.S.D.Ohio 2005) (collecting cases). A proof of claim lacking necessary facts or supporting documents simply is not entitled to a presumption of prima facie validity. Kincaid, 388 B.R. 610, 2008 WL 2278895 at 2, citing In re Heath, 331 B.R. 424, 433 (9th Cir. BAP 2005); Dove-Nation, 318 B.R. at 152; In re Moreno, 341 B.R. 813, 817 (Bankr.S.D.Fla.2006); In re Shank, 315 B.R. 799, 810 (Bankr.N.D.Ga. 2004) (quoting In re Stoecker, 5 F.3d 1022, 1028 (7th Cir.1993)). Consequently, at most B-Real loses the presumption that its proofs of claim are valid prima facie and takes on the burden of proving that the claims are valid. If it fails to do so, the claims may be disallowed. As a result, B-Real's motion to dismiss the parts of the complaint demanding disallowance of the claims fails. That does not conclude the analysis, however. The debtors also allege that Real's failure to comply with Rule 3001 was intentional and was part of a normal pattern. Complaint, ¶ 30. They urge the court to award damages under 11 U.S.C. § 105(a) for the alleged misconduct. The remaining issue thus is whether on the facts plaintiffs allege they have a private 323 right of action against B-Real under 11 U.S.C. § 105. Bankruptcy Code section 105(a) empowers bankruptcy courts to issue any orders or judgments necessary or appropriate to carry out provisions of the Bankruptcy Code. However, section 105(a) does not empower courts to create or recognize a private right of action if another Bankruptcy Code provision does not create substantive relief.[6]See In re Joubert, 411 F.3d 452, 455 (3 d Cir.2005) (section 105(a) cannot be used to imply a private remedy for a debtor harmed as a result of the mortgagee's improperly charging fees in violation of 11 U.S.C. § 506(b)); Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 509 n. 3 (9th Cir.2002) ("If Congress had understood § 105 as permitting a private cause of action, the 1984 amendment creating one for violations of § 362 would have been superfluous"); Pertuso v. Ford Motor Credit, 233 F.3d 417, 421-22 (6th Cir.2000) (declining to find private right of action under § 524 either directly or through § 105(a) for post-discharge injunction violation). Several courts specifically have concluded that section 105 does not provide a private right of action for damages for filing a false proof of claim. See In re Kmart Corp., 2006 WL 952042 at 16 (Bankr.N.D.Ill.2006); In re Yancey, 301 B.R. 861, 868-69 (Bankr.W.D.Tenn.2003); In re Knox, 237 B.R. 687, 699-700 (Bankr. N.D.Ill.1999); In re Simmons, 237 B.R. 672, 674 (Bankr.N.D.Ill.1999). These cases are persuasive and support the conclusion that as a matter of law, the debtors do not have a private right of action under section 105 against B-Real for filing proofs of claim for time-barred debts. This conclusion does not leave debtors without a remedy. Bankruptcy Rule 9011 can be used to sanction a creditor that files a proof of claim without proper prefiling investigation and support, or that otherwise violates Rule 9011. See In re Cassell, 254 B.R. 687, 691 (6th Cir. BAP 2000); In re Wingerter, 376 B.R. 221, 224 (Bankr.N.D.Ohio 2007); In re Dansereau, 274 B.R. 686, 688-89 (Bankr.W.D.Tex. 2002); In re Knox, 237 B.R. 687 at 697; In re McAllister, 123 B.R. 393, 395 (Bankr. D.Or.1991); In re Hamilton, 104 B.R. 525, 527 (Bankr.M.D.Ga.1989). The debtors specifically referred to Rule 9011 sanctions in the prayer of their complaint. The court will dismiss the second claim in the complaint for failing to state a claim upon which relief can be granted. 3. Plaintiffs have No Damage Claim under 11 U.S.C. § 105 for B-Real's Filing of Prescribed Claims In the first and third claims for relief in their complaint, the debtors object to claims 16, 17 and 18 based on prescription under Louisiana law. They seek disallowance of these claims and damages under 11 U.S.C. § 105 for the allegedly false claims, and other non-monetary relief.[7] The parties agree that Louisiana Civil Code article 3494 bars after three years any action "for the recovery of compensation for services rendered" or an action "on an open account." BReal argues that Louisiana law does not provide for damages 324 for filing actions on prescribed claims and that the sole remedy for filing a time-barred claim is dismissal of a lawsuit asserting those claims (and by analogy in bankruptcy, disallowance of the creditor's claims). The court adopts without repetition its analysis of the plaintiffs' claims for damages under Fed. R. Bankr.P. 3001 and 11 U.S.C. § 105, on which it relies to hold that plaintiffs have no private right of action under 11 U.S.C. § 105 to recover damages from B-Real for filing prescribed claims. However, B-Real's position is incorrect in one respect: Louisiana courts indeed have penalized creditors for pursuing prescribed claims. For example, in Bracken v. Payne and Keller Company, Inc., 970 So.2d 582, 590-91 (La.App. 1st Cir.2007) and Dubois v. Brown, 818 So.2d 864, 866-67 (La.App. 1st Cir.2002), state courts imposed sanctions on parties that filed prescribed actions. The authority on which the state courts relied was Louisiana Code of Civil Procedure article 863, the Louisiana equivalent of Rule 9011. That rule provides for the imposition of reasonable expenses and attorney's fees upon a party or attorney who signs a pleading that was filed without reasonable inquiry to determine that the pleading is well grounded in fact; that it is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. La.Code Civ. P. art. 863(B). However, article 863 of the Louisiana Code of Civil Procedure is inapplicable here because it is a state procedural measure. See Maryland Casualty Co. v. Williams, 377 F.2d 389, 393 n. 1 (5th Cir. 1967) (federal court applies state substantive law where relevant, but its own rules of procedure). Thus, it provides no basis for concluding that Louisiana state substantive law confers a private right of action on the facts plaintiffs have alleged. The first and third claims for relief do not state a claim upon which relief can be granted insofar as they allege claims for damages for filing time-barred claims. They will be dismissed. 4. Filing a Proof of Claim Does Not Violate 11 U.S.C. § 362 B-Real also seeks dismissal of plaintiffs' demand for damages under 11 U.S.C. § 362 for the filing of claims 16, 17 and 18. It contends that merely filing a proof of claim does not violate the automatic stay. Bankruptcy Code section 501 specifically permits creditors to file proofs of claim. "[T]he filing of a Proof of Claim before a bankruptcy court ... is the logical equivalent of a request for relief from the automatic stay, which cannot in itself constitute a violation of the stay...." In re Sammon, 253 B.R. 672, 681 (Bankr.D.S.C.2000). Other courts considering the issue have reached a similar conclusion. See e.g. U.S. v. Inslaw, Inc., 932 F.2d 1467 (D.C.Cir. 1991) ("For obvious reasons ... courts have recognized that § 362(a) cannot stay actions specifically authorized elsewhere in the bankruptcy code"); In re Surprise, 342 B.R. 119, 122 (Bankr.N.D.N.Y.2006) (concurring with Sammon); In re Sims, 278 B.R. 457, 472 (Bankr.E.D.Tenn.2002) (accord); In re I.C.H. Corp., 219 B.R. 176, 190 (Bankr.N.D.Tex.1998), rev'd on other grounds, 230 B.R. 88 (N.D.Tex.1999) ("The automatic stay is not applicable to assertion of a claim in a proof of claim filed in a Bankruptcy Court"). See also In re Nelson, 234 B.R. 528, 534 (Bankr.M.D.Fla. 325 1999) ("The contention that the exercise of a mandated statutory right under the Bankruptcy Code [such as the filing of a nondischargeability complaint] is a violation of the automatic stay is almost as absurd as a contention that any creditor who files a proof of claim in bankruptcy violated the automatic stay"). The complaint's fourth claim for relief will be dismissed for failing to state a claim upon which relief can be granted. 5. The Bankruptcy Court Claims Process Does Not Supplant the FDCPA The debtors allege in their fifth claim for relief that B-Real's actions were false, deceptive, misleading, unfair and unconscionable, and violated the FDCPA, 15 U.S.C. § 1692 et seq. More specifically, the debtors claim that B-Real's practice of filing prescribed claims without proper supporting documentation violates FDCPA sections 1692d, 1692e and 1692f. B-Real moves to dismiss the fifth claim on the grounds that the Bankruptcy Code supercedes the FDCPA and the debtors' remedies lie only in the Bankruptcy Code. The Fifth Circuit has not ruled on this specific issue, and the only two circuit courts of appeal that have considered it disagree on whether actions under both the Bankruptcy Code and the FDCPA can co-exist. The Ninth Circuit held in Walls v. Wells Fargo, 276 F.3d 502 (9th Cir.2002) that a debtor may not maintain simultaneous actions under both 11 U.S.C. § 105 and the FDCPA. The court wrote that the debtor's FDCPA claim was actually an action for sanctions under Bankruptcy Code § 105 for the creditor's alleged violation of the 11 U.S.C. § 524 discharge injunction. Id. at 510. As a result, the debtor/plaintiffs sole remedy was under the Bankruptcy Code, and the debtor could not "circumvent the remedial scheme of the Code" by suing the creditor under the FDCPA. Id. A different analysis in Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir.2004) led the court to conclude that a debtor could make an FDCPA claim for a creditor's alleged violations of the discharge injunction. The Seventh Circuit decided that although the Bankruptcy Code and the FDCPA may overlap, the Bankruptcy Code did not repeal the FDCPA. Thus, it reasoned that a debtor can bring an action against a creditor under both provisions. The court declared that "[o]ne federal statute does not preempt another," but that one of two federal statutes addressing the same subject implicitly can repeal the other if there is an "irreconcilable conflict between the statutes or a clear expressed legislative decision that one replace the other." Id. at 730. Randolph held that a debtor could seek to enforce both title 11's provision penalizing intentional violations of the automatic stay and the FDCPA, concluding that the "operational differences" between the two schemes were not irreconcilable. Reported decisions from several lower courts considering whether a debtor can seek relief under the FDCPA specifically in connection with the filing of a proof of claim in a bankruptcy proceeding, including Seventh Circuit jurisprudence preceding Randolph, have concluded a debtor cannot seek relief under the FDCPA for creditors' actions relating to their bankruptcy cases. See Adair v. Sherman, 230 F.3d 890, 895-96 (7th Cir.2000) (FDCPA not proper vehicle for challenging allegedly inflated proof of claim); Kaiser v. Braje & Nelson, LLP, 2006 WL 1285143 at 6, 7 (Bankr.N.D.Ind.2006) (once a debtor is in bankruptcy court, the Bankruptcy Code provides the remedies for matters connected with the case); Baldivin v. McCalla, 326 Raymer, Padrick, Cobb, Nichols & Clark, LLC, 1999 WL 284788 at 4-6 (N.D.Ill. 1999) (FDCPA claim cannot be based on proof of claim filed in dismissed bankruptcy case); Gray-Mapp v. Sherman, 100 F.Supp.2d 810, 813-14 (N.D.Ill.1999) ("nothing in the FDCPA suggests that it is intended as an overlay to the protections already in place in the bankruptcy proceedings"); In re Gilliland, 386 B.R. 622, 623 (Bankr.N.D.Miss.2008) (debtor's action for violation of discharge injunction by filing proof of claim could not form basis of FDCPA action); In re Rice-Etherly, 336 B.R. 308, 312-13 (Bankr.E.D.Mich.2006) (agreeing with Baldwin); In re Cooper, 253 B.R. 286, 291 (Bankr.N.D.Fla.2000) (debtor could only attack a proof of claim using the remedies of the Bankruptcy Code). But see Dougherty v. Wells Fargo Home Loans, Inc., 425 F.Supp.2d 599, 605-6 (E.D.Pa.2006) (FDCPA claim based on post-petition, post-confirmation acts by creditor were not precluded by the Bankruptcy Code); Peeples v. Blatt, 2001 WL 921731 at 3-4 (N.D.Ill.2001) (no preclusion of FDCPA by Bankruptcy Code); Molloy v. Primus Auto. Financial Services, 247 B.R. 804, 820-21 (C.D.Cal.2000) (accord). Most of the opinions concluding that the Bankruptcy Code precludes an action under the FDCPA pre-date Randolph. The others are either factually distinguishable or based on limited reasoning.[8] The thoughtful analysis of Randolph, on the other hand, is persuasive, and supports the conclusion that debtors may urge a FDCPA claim for alleged actions of Real in connection with their bankruptcy case. Based on the allegations of the debtors' complaint, it is not possible to conclude on a motion to dismiss that the debtors cannot prove facts entitling them to relief under the FDCPA.[9] 6. The Louisiana Unfair Trade Practices Laws Do Not Apply to the Proof of Claim Process B-Real urges the court to dismiss the debtors' claim for violation of the Louisiana UTPCPL, La. R.S. 51:1401 et seq. It argues that the Bankruptcy Code preempts the UTPCPL and bars the debtors' suit against B-Real for relief on these facts. UTPCPL section 1405 prohibits "[unfair methods of competition and unfair or deceptive acts or practices in the conduct of trade or commerce...." Section 1409 confers upon an individual who has lost money or property as a result of the proscribed acts to bring a private right of action to recover damages, including attorney's fees and costs. The debtors have an action against Real under La. R.S. 51:1409 only if the unfair or deceptive acts complained of occurred "in the conduct of trade or commerce." The UTPCPL defines "trade" or "commerce" as "the advertising, offering for sale, sale, or distribution of any services and any property...." La. R.S. 51:1402(9).[10] 327 Filing a proof of claim in a bankruptcy case cannot reasonably be construed as advertising, selling or distributing services or property within the meaning of section 1402(9). Because B-Real's mere filing of the prescribed claims in the debtors' bankruptcy was not trade or commerce under the UTPCPL, on the basis of the allegations in the complaint it is not unlawful under La. R.S. 51:1405. Accordingly, the complaint's sixth claim for relief fails to state a claim upon which relief can be granted. Conclusion The court will dismiss the complaint's second, fourth and sixth claims for relief in their entirety. The court will also dismiss the complaint's first and third claims for relief insofar as those claims seek damages. B-Real's motion to dismiss all other claims of the complaint is denied. NOTES [1] Liberative prescription is a civilian concept analogous to the common law statute of limitations. See generally La. Civ.Code art. 3492 et seq. B-Real conceded on the first page of its Reply to Plaintiffs' Objection (P-23) to Real's motion to dismiss that the three claims are prescribed. [2] Section 1692d of title 15, United States Code, provides in relevant part that "[a] debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." Section 1692e bars debt collectors from use of "any false, deceptive, or misleading representation or means in connection with the collection of any debt...." Section 1692f states that "[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." [3] B-Real's wide-ranging motion also argued that because the debtors' attorney would receive the $2500 attorney's fee customarily allowed to chapter 13 debtor's counsel in this district, any further fees and costs awarded to him in connection with these claims would be "double-dipping." Because this argument goes to the quantum of recoverable damages rather than to the validity of the debtors' claims, it is not ripe. [4] Actually, whether debtors initiated an adversary proceeding to deal with the claims is not an issue of standing. [5] See Fed. R. Bankr.P. 9009. [6] See e.g. 11 U.S.C. § 362(k), empowering bankruptcy courts to award damages for certain willful violations of the automatic stay. [7] The complaint's third claim for relief also contains the debtors' request that the court prohibit B-Real from amending or modifying the claims, and cancel and discharge the underlying debts, even though the debtors have not received a discharge. It has cited no authority to support this remarkable relief, but because B-Real did not challenge it, the court will not address the claims at this point. [8] Neither Kaiser nor Rice-Etherly mentions Randolph. Also, the debtor in Rice-Etherly had not objected to the claim that was the subject of the FDCPA claim. The Gilliland debtor alleged that creditors had violated the discharge injunction by filing proofs of claim but did not attack the validity of the claims themselves, which the creditors withdrew only after the debtor sued them. [9] This ruling specifically does not reach the issue of whether the FDCPA applies' to Real, in light of the plaintiffs' repeated allegations that B-Real is a debt collector. See 15 U.S.C. § 1692a. [10] Apparently questions concerning the bounds of activity constituting "trade" or "commerce" under the UTPCPL have not stirred great controversy in Louisiana state courts, since research produced only one decision construing the term. In Webb v. Theriot, 704 So.2d 1211, 1215 (La.App. 3d Cir. 1997), the court concluded that the lease and sublease of a hunting camp was not "trade" or "commerce" within the meaning of the UTPCPL.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1867936/	188 S.W.3d 354 (2006) TANA OIL AND GAS CORPORATION, Appellant v. Richard G. CERNOSEK; Cer-Mor-Leb, a General Partnership; and Garth C. Bates, Appellees. No. 03-04-00820-CV. Court of Appeals of Texas, Austin. March 10, 2006. 356 Michael R. Steinhauser, Flantonia, R. Clay Hoblit, Roberta S. Dohse, Gonzales Hoblit & Ferguson LLP, Corpus Christi, Raul A. Gonzalez, Locke Liddell & Sapp L.L.P., Austin, N. Mark Ralls, Chaves, Gonzales & Hoblit, LLP, San Antonio, for appellant. Tom C. McCall, David B. McCall, The McCall Firm, Austin, Britton D. Monts, Monts & Ware, LLP, Dallas, for appellees. Before Justices B.A. SMITH, PATTERSON and PURYEAR. OPINION BEA ANN SMITH, Justice. We grant the motion for rehearing solely on the issue of attorney's fees and withdraw our opinion and judgment of December 14, 2005. We substitute this opinion, delete the remand to the district court, and render judgment that Tana is not entitled to recover attorney's fees. The motion for rehearing is overruled in all other respects. Tana Oil and Gas Corp. (Tana) appeals the district court's grant of partial summary judgment holding that Tana breached the terms of its oil and gas lease agreements with appellees, a class of mineral-interest owners (the "Class"), by underpaying royalties owed to Class members and by deducting gas-lift fees from certain Class members' royalty payments. Tana also appeals the district court's grant of summary judgment awarding damages and attorney's fees to the Class. Tana contends that it paid royalties based on 100% of the amount it realized from the sale of gas produced from the Class members' leases and that the plain language of the royalty provisions permits the deduction of reasonable post-production costs. Tana also claims that it did not impermissibly deduct gas-lift fees. Tana insists that the district court improperly denied its counter-motion for summary judgment because it did not breach any Class member's lease agreement as a matter of law.[1] We agree with Tana and reverse the district court's partial summary judgment and render judgment in favor of Tana. Consequently, we also reverse the district court's summary judgment awarding damages and attorney's fees to the Class. Background All members of the Class owned royalty interests in a series of wells located in Fayette County and executed a gas lease with Tana. This dispute involves Tana's alleged underpayment of royalties to Class members from 1992 to 1995. In March 1992, Tana entered into a field-wide gas purchase and processing contract (the "gas contract") with Clajon Gas Company, L.P. Tana agreed to sell Clajon all gas produced from the Class's combined leases and the right to process it. In exchange, Clajon agreed to pay Tana: (1) 84% of the combined monthly sales prices of the component-plant products[2] extracted from the raw gas; and (2) 84% of the alternate market resale price for all residue gas 357 remaining after treatment.[3] Under the initial gas contract, title to the gas passed from Tana to Clajon upon delivery at the wellhead. On July 1, 1992, three transactions involving the Class's gas occurred: (1) Clajon assigned its interest in the gas contract to Aquila Southwest Pipeline Corporation (Aquila); (2) Aquila assigned its interest in the gas contract to Fayette County Gathering System (Fayette); and (3) Fayette entered into a separate gas purchase and processing contract (the "resale contract") with Aquila. Under this resale contract, title to the gas passed from Fayette to Aquila upon delivery at the wellhead. As a result of the assignments and the resale contract, title to the gas passed twice from Tana to Fayette and from Fayette to Aquilabefore any raw gas was processed. Although the title to the gas passed twice at the wellhead, the final sales price under each contract was contingent on the downstream monthly sales price of the residue gas and the extracted liquids. After the raw gas was processed, the residue gas and the extracted liquids were sold. Tana received monthly checks for its 84% share of the proceeds from these monthly sales. The parties agree that all costs associated with treating and compressing the gas were deducted from Tana's 84% share prior to Tana receiving its monthly checks.[4] These expenses are generally referred to as post-production costs. See Judice v. Mewbourne Oil Co., 939 S.W.2d 133, 134 (Tex.1996); Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 122 (Tex.1996). It is also undisputed that Aquila used a portion of the gas produced to fuel its processing plant and compressors. In order to calculate each Class member's monthly royalty payment, the sum of the amounts Tana receivedits 84% share of the proceeds generated from the sales of the residue gas and the extracted liquids, plus the reimbursement received for compression costswas multiplied by each Class member's fractional royalty interest. The underlying litigation began in May 1996 when Garth Bates sued Tana for breach of contract for improperly deducting post-production costs from his royalty payments. See Tana Oil & Gas Corp. v. Bates, 978 S.W.2d 735, 738 (Tex.App.-Austin 1998, no pet.). Bates's original petition alleged that he brought his suit on behalf of the class of persons to whom Tana made royalty payments under leases covered by the gas contract. He attempted to have this broad class certified, but the district court refused because it "could not overcome the need to consider the royalty clause in each applicable lease." Bates then moved that the class definition be limited to royalty owners whose leases with Tana contained one specific royalty provision.[5] The district court certified this 358 more limited Class in February 1998. See id. at 744 (affirming on interlocutory appeal district court's order certifying Class). In March 2001, the Class filed its sixth amended petition in which it suggested that the class definition be amended to include certain royalty owners whose leases contained royalty provisions that were substantially similar to the previously certified definition. In January 2002, the district court modified its original class certification order to include mineral-interest owners with any of the following three royalty clauses: [1] ... to pay lessor for gas and casinghead gas produced from said land (1) when sold by lessee, [royalty fraction] of the amount realized by lessee, computed at the mouth of the well ...; or [2] The royalties to be paid by Lessee are: ... (b) on gas, including casinghead gas and all (or other) gaseous substance(s), produced from said land provided that on gas sold at the well(s) the royalty (royalties) shall be [royalty fraction] of the amount realized from such sale.... or [3] Royalty on Gas: Lessee shall pay to Lessor as royalty on gas, including casinghead gas or other gaseous substance(s) produced from said land and sold on or off the premises [royalty fraction] of the net proceeds at the well received from the sale thereof.... See Tana Oil & Gas Corp. v. Cernosek, No. 03-02-00096-CV, 2002 WL 536308, 2002 Tex.App. LEXIS 2560 (Tex.App.-Austin April 11, 2002, pet. denied) (not designated for publication) (dismissing Tana's appeal of class modification and holding that modification makes no fundamental change in class certification order). The modified Class moved for partial summary judgment on its breach of contract claim, insisting that Tana breached the lease agreement as a matter of law because Tana did not pay royalties based on 100% of the gross metered volumes of gas sold at the well. Essentially, the Class maintained that Tana breached the lease agreement by calculating the Class's royalty payments based on 84% rather than 100% of the post-processing sales proceeds received from the sale of the residue gas and extracted liquids. The Class further alleged that Tana breached the lease agreement by not paying royalties on gas that the processor consumed in order to treat and compress the gas, by improperly burdening the royalty owners with post-production charges stemming from the compression and treating of the gas that occurred downstream after the gas had already been sold twice at the wellhead, and by impermissibly deducting gas-lift fees from certain Class members' royalty payments. The Class also moved for summary judgment on damages and attorney's fees. In response, Tana filed a cross-motion for summary judgment, contending that it paid royalties based on 100% of the amount it realized from its sale of the raw gas at the well and insisting that the plain language of the leases permits the deduction of reasonable post-production costs, as well as the gas-lift fees in question. In September 2004, the district court granted both of the Class's summary-judgment motions and denied Tana's. The final 359 judgment did not state the grounds on which the district court relied. The district court awarded the Class $1,267,470.33, plus prejudgment interest of $937,846.72, for their unpaid royalty interests. The district court also awarded the Class $780,860 in attorney's fees. This appeal followed. Standard of Review We review the district court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co., 164 S.W.3d at 661; Knott, 128 S.W.3d at 215; Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997). Summary judgment is proper when there are no disputed issues of material fact and the movant is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c); Shell Oil Co. v. Khan, 138 S.W.3d 288, 291 (Tex.2004) (citing Knott, 128 S.W.3d at 215-16). When both parties move for summary judgment and the district court grants one motion and denies the other, the reviewing court should review the summary-judgment evidence presented by both sides, determine all questions presented, and render the judgment the district court should have rendered. Texas Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex.2004); FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000). The reviewing court must affirm summary judgment if any of the summary judgment grounds are meritorious. Patient Advocates, 136 S.W.3d at 648; FM Props., 22 S.W.3d at 872; Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995). Discussion Tana contends that the district court erred by denying its motion for summary judgment and by granting the Class's motions. Tana maintains that it complied with the plain language of the applicable royalty provisions by calculating royalties owed to the Class based on 100% of the amount Tana realized from its sale of the gas. Tana also avers that any gas-lift deductions were permitted under the terms of the applicable lease agreements. Accordingly, Tana asserts that it did not breach any Class member's lease agreement as a matter of law. We agree. An oil and gas lease is a contract, and its terms are interpreted as such. See Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex.2002); Skelly Oil Co. v. Archer, 163 Tex. 336, 356 S.W.2d 774, 778 (1961). Construing an unambiguous lease is a question of law for the court. Anadarko, 94 S.W.3d at 554; Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991). Accordingly, we review lease-construction questions de novo. See Anadarko, 94 S.W.3d at 554; El Paso Natural Gas Co. v. Minco Oil & Gas, Inc., 8 S.W.3d 309, 312 (Tex.1999). In construing an unambiguous lease, our primary duty is to ascertain the parties' intent as expressed within the lease's four corners. Anadarko, 94 S.W.3d at 554; see also Yzaguirre v. KCS Res., Inc., 53 S.W.3d 368, 372 (Tex.2001); Luckel, 819 S.W.2d at 461. We give the language its plain, grammatical meaning unless doing so would clearly defeat the parties' intentions. Anadarko, 94 S.W.3d at 554; Fox v. Thoreson, 398 S.W.2d 88, 92 (Tex.1966). We examine the entire lease and attempt to harmonize all its parts, even if different parts appear contradictory or inconsistent, because we 360 presume that the parties intended every clause to have effect. Anadarko, 94 S.W.3d at 554; Heritage Res., 939 S.W.2d at 121; Luckel, 819 S.W.2d at 462. However, we will not hold the lease's language to impose a special limitation unless the language is so clear, precise, and unequivocal that we can reasonably give it no other meaning. Anadarko, 94 S.W.3d at 554; Fox, 398 S.W.2d at 92. Tana's royalty obligations Tana is required to calculate royalties owed to the Class based on three royalty provisions contained in the various lease agreements. See Alameda Corp. v. TransAmerican Natural Gas Corp., 950 S.W.2d 93, 97 (Tex.App.-Houston [14th Dist.] 1997, writ denied) (recognizing that royalty payments must be determined from provisions of oil and gas lease). Depending on which of the three applicable royalty provisions is contained in a Class member's lease, Tana is obligated to pay a fractional share of either the "amount realized" or "net proceeds" from its sale of the gas at the well. The term "amount realized" has been construed by Texas courts to mean the proceeds received from the sale of the gas or oil. See Yzaguirre, 53 S.W.3d at 372-73; Heritage Res., 939 S.W.2d at 121 (recognizing that royalty is calculated from proceeds when royalty provision is based upon amount realized); Exxon Corp. v. Triphene Middleton, 613 S.W.2d 240, 242-46 (Tex.1981) ("If the parties intended royalties to be calculated on the amount realized standard, they could and should have used only a proceeds-type clause."); see also 8 Patrick H. Martin & Bruce M. Kramer, Williams & Meyers Oil and Gas Law, Manual of Terms 45 (2004) (defining amount realized to mean, "A term that is used in the royalty clause or an oil division clause that is commonly viewed as synonymous with proceeds."). In its motion to amend the class definition, the Class stated, "The terms amount realized, proceeds and net proceeds computed at the wellhead are synonymous: they refer to the money obtained by an actual sale." The phrase "at the well" means before value is added by preparing the raw gas for market. Judice, 939 S.W.2d at 137. Therefore, the unambiguous language of the royalty provisions demonstrates the parties' clear intent that Tana be required to pay royalties on all amounts it actually received from its sale of the raw, unprocessed gas at the well. Tana sold the raw gas to Fayette at the well. The gas contract did not state a fixed price for the gas. It stipulated that the price for 100% of the raw gas sold by Tana at the well would be 84% of the resale price of the residue gas and extracted liquids, after treatment. This pricing formula represents the negotiated value of the raw gas. In its motion for summary judgment, the Class argued that, because Tana is obligated to pay royalties on 100% of the total volume of gas sold at the well, Class members are entitled to royalties on the additional 16% of the proceeds from the sale of the residue gas and the extracted liquids after processingproceeds that were not remitted to Tana under the terms of the gas contract. The Class maintained that it is irrelevant that Tana did not receive and was not owed this portion of the total post-processing sales proceeds. The Class is incorrect. The Class erred by equating the sale of raw gas at the well to the separate and distinct third-party sales of the residue gas and extracted liquids on the open market. Tana did not sell the residue gas or the liquids; Tana sold raw gas at the well, before value was added by preparing the gas for market. See id. In exchange for its sale of 100% of the total volume of raw gas at the well, Tana received a price equivalent to 84% of the proceeds for the 361 processed gas. Tana never received all of the proceeds from the sales of the residue gas and the liquids. Accordingly, by paying the Class royalties based on 100% of the money it actually received, Tana did in fact pay royalties on 100% of the total volume of raw gas that it sold at the well. Thus, as a matter of law, Tana did not breach the lease agreements because it calculated royalties owed to the Class based on the full amount it received from its sale of the raw gas at the well. Post-production costs The Class alleged in its motion for partial summary judgment that it was improper for Tana to allow Aquila to deduct compression and treating costs from the sales price of the raw gas Tana sold at the well. The Class averred that the lease agreements forbid these deductions because (1) the costs were incurred after the gas was sold at the well by Tana and then resold at the well by Fayette to Aquila under a different contract at a higher price, and (2) the costs were incurred off-lease and did not add value to the raw gas delivered by Tana to Fayette. Consequently, the Class claimed that Tana breached the lease agreements by deducting post-production costs before calculating their royalties. We disagree. The underlying royalty provisions provide that Tana is to pay royalties on either the amount it realized or its net proceeds from the sale of the gas at the well. As noted, the Class concedes that the terms "amount realized" and "net proceeds" are synonymous. The supreme court has stated that the term "net proceeds" expressly contemplates deductions, while the phrase "at the well" means before value is added by preparing the gas for market. Id. Thus, the plain language of the applicable royalty clauses acknowledges that deductions may be necessary to determine the value of the gas at the well. It is irrelevant that the post-production costs were incurred after the raw gas was sold twice at the well because (1) the initial gas contract between Tana and Fayette set the price for the raw gas that Tana sold, and (2) the Class's royalties are based on the net proceeds Tana received from the sale of the raw gas at the well. Tana sold the raw gas at the well for a percentage of what the treated residue gas and extracted liquids would be sold for downstream on the open market. Accordingly, the final sales price for the raw gas that Tana sold at the well can only be established by working back from the downstream third-party sales of the residue gas and the extracted liquids to Tana's sale of the raw gas at the well. Tana insists that post-production costs must be deducted in order to ascertain the sales price of the raw gas it sold at the well. We agree with Tana that the first logical step in working back to the at-the-well price for the raw gas is to subtract the costs associated with treating and compressing the gas from the combined post-processing sales proceeds.[6] It is clear that the post-production costs added value to the raw gas sold by Tana. If these costs are not deducted, then the Class's royalties would be based on the proceeds Tana received from its sale of the raw gas plus the costs incurred to prepare that gas for sale on the open market. Therefore, Tana's net proceeds cannot be determined unless post-production costs are deducted. 362 We hold that the Class's lease agreements permit the deduction of reasonable post-production costs. Therefore, Tana did not breach the lease agreements by failing to pay royalties on the amount deducted to cover post-production expenses. Plant fuel In its motion for partial summary judgment, the Class also claimed that Tana breached the terms of the lease agreements by failing to pay royalties on the value of gas that was metered and sold at the well but consumed off-lease by the processor for plant and compressor fuel. It is undisputed that the processor used gas attributable to the Class's leases to operate its plant and run its compressors while treating the gas. In the gas contract, Tana agreed to provide gas to the processor for compression and plant fuel. The gas contract specifically states that Tana "agrees to furnish its prorata share of fuel for said compression at no cost to Buyer" and that Tana was selling all of the gas attributable to Class's leases except the portion that may be "lost or used for compression and treating fuel or in other of Buyer's pipeline system operations." We do not know, nor is it relevant, why Tana agreed to these terms. Our only concern is whether Tana fully complied with its obligations as stated in the lease agreements. See Alameda Corp., 950 S.W.2d at 97. Under the lease agreements, Tana is to pay the Class royalties on the net proceeds it actually receives from the sale of the raw gas at the well. As discussed above, Tana did not sell the raw gas at a fixed price; it entered into an agreement, under which the price of the raw gas would be contingent upon the downstream sales prices of the treated residue gas and extracted liquids. The gas used by the processor for compression and plant fuel was not sold and, as a result, Tana did not receive any money for this gas. Tana is only obligated under the lease agreements to pay the Class royalties on money actually received; Tana is not required to pay royalties based on the value of gas that was never sold downstream. Accordingly, Tana did not breach the lease agreements by failing to pay royalties on gas consumed by the processor. Gas-lift fees In its motion for summary judgment, the Class argued that Tana breached certain Class members' leases by impermissibly deducting gas-lift fees from the members' royalty payments. The term "gas lift" refers to a method of raising oil by injecting gas into the bottom of the hole to force the oil up. See 8 Patrick H. Martin & Bruce M. Kramer, Williams & Meyers Oil and Gas Law, Manual of Terms 441 (2004). Both Tana and the Class agree that the costs associated with this process are considered operational or production expenses. The general rule is that a royalty interest is to be free of production costs. See Temple-Inland Forest Prods. Corp. v. Henderson Family P'ship, Ltd., 958 S.W.2d 183, 186 (Tex. 1997). However, the general rule may be modified by agreement. See Heritage Res., 939 S.W.2d at 122; Enron Oil & Gas Co. v. Joffrion, 116 S.W.3d 215, 221 (Tex. App.-Tyler 2003, no pet.). Tana insists that there was no breach in this instance because it was not obligated to pay royalties on gas used in all operations under the applicable lease agreements.[7] We agree with Tana. 363 A review of the record reveals that Tana periodically used gas, produced from the Class's leases, for gas-lift operations at five of the underlying gas wells. Thirty-six Class members own royalty interests in these five wells. The record includes the lease agreements executed between Tana and each of these Class members. Each of these lease agreements contains one of the following provisions: [1] Lessee may recycle gas for gas lift purposes on the leased premises... and no royalties shall be payable on the gas so recycled until such time as the same may thereafter be produced and sold or used by Lessee in such manner as to entitle Lessor to a royalty thereon under the royalty provisions of this lease. or [2] Lessee shall have free use of oil, gas, coal and water from said land, except water from Lessor's wells, for all operations hereunder, and the royalty on oil gas, and coal shall be computed after deducting any so used. or [3] Lessee [Tana] shall have the use, free from royalty, of water other than from Lessor's water wells and of oil and gas produced from said land in all operations hereunder. or [4] For the purpose of computing the royalties to which owners of royalties and payments out of production and each of them shall be entitled on production of oil and gas, or either of them, from the pooled unit, there shall be allocated to the land covered by this lease and included in said unit (or to each separate tract within the unit if this lease covers separate tracts within the unit) a pro rata portion of the oil and gas, or either of them, produced from the pooled unit after deducting that used for operations on the pooled unit. The plain language of each of these provisions authorizes Tana to use gas produced from the leases in all operations. In addition, it is clear that Tana was not required to pay royalties on any gas so used. Therefore, Tana did not breach any Class member's lease agreement as a matter of law by deducting gas-lift fees. Attorney's fees In its third amended petition, Tana requested attorney's fees pursuant to the provisions of the civil practice and remedies code. See Tex. Civ. Prac. & Rem.Code Ann. § 38.001(8) (West 1997). A prevailing party cannot recover attorney's fees from an opposing party unless permitted by statute or by contract between the parties.[8]Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 95 (Tex.1999). Furthermore, the supreme court has held that a prevailing party in a breach of contract action is not entitled to attorney's fees under section 38.001(8) of the civil practice and remedies code unless they *364 recover damages. See Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex.1997) (holding that party must (1) prevail on cause of action for which attorney's fees are recoverable, and (2) recover damages in order to recover attorney's fees); see also Smith v. Texas Farmers Ins. Co., 82 S.W.3d 580, 588 (Tex.App.-San Antonio 2002, pet. denied) (section 38.001 does not provide for attorney's fees in the pure defense of a claim). We have held that Tana did not breach any Class member's lease agreement. Moreover, Tana did not file a claim or counterclaim seeking damages. Without recovering damages, Tana is not entitled to attorney's fees under the civil practices and remedies code. Green Int'l, Inc., 951 S.W.2d at 390. Conclusion We reverse the district court's summary judgment and render judgment that Tana did not breach the lease agreements by: (1) calculating royalties based on the amount it actually received from its sale of the raw gas at the well; (2) failing to pay royalties on amounts deducted to cover post-production expenses; (3) failing to pay royalties on the value of the raw gas given to the processor for plant and compressor fuel; or (4) deducting gas-lift fees from certain Class member's royalty payments. NOTES [1] Tana also claims that the district court: (1) erred by denying its motion for summary judgment on the basis of the statute of limitations; and (2) abused its discretion in modifying the Class and in not preparing a trial plan. Because we hold that Tana did not breach the Class's lease agreements as a matter of law, we do not reach these issues. [2] The contract defined "component plant products" as the liquid hydrocarbons extracted from the gas by the processor that are independently marketable apart from the gas. These hydrocarbons include: ethane, propane, iso-butane, normal butane, and pentanes. We will refer to the component plant products as the extracted liquids. [3] The contract defined "Residue gas" to mean the portion of gas remaining at the outlet of the processing plant after extraction of plant products, fuel requirements, losses and other usage within the plant and Buyer's pipeline, plus any gas that by-passed the processing plant. [4] However, all compression costs that were initially deducted were reimbursed to Tana under the terms of a separate agreement. Under the terms of that agreement, Tana received a monthly reimbursement check through its sister company TECO. [5] The royalty provision stated that Tana as lessee was "to pay lessor for gas and casinghead gas produced from said land (1) when sold by lessee, [royalty fraction] of the amount realized by lessee, computed at the mouth of the well, or (2) when used by lessee off said land or in the manufacture of gasoline or other products, [royalty fraction] of the amount realized from the sale of gasoline or other products extracted therefrom and [royalty fraction] of the amount realized from the sale of residue gas after deducting the amount used for plant fuel and/or compression...." [6] Although the cost of compressing the gas was deducted from Tana's sales proceeds, they were fully reimbursed to Tana through a separate agreement. The money Tana received from the compression reimbursement was added to its sales proceeds prior to calculating the Class's royalties. The net effect of the deduction and subsequent reimbursement is that neither Tana nor the Class bore any of the compression costs. [7] On appeal, the Class contends that Tana's beliefthat the Class is attempting to recover unpaid royalties on gas-lift feesis incorrect. The Class alleges that its summary-judgment position was that it is entitled to recover the total amount of gas-lift fees deducted by Tana because Texas law provides that a royalty interest is to be free of production expenses. See Temple-Inland Forest Prods. Corp. v. Henderson Family P'ship, Ltd., 958 S.W.2d 183, 186 (Tex.1997). However, the Class's damages schedules, provided in support of its motion for summary judgment, establish that the Class is, in fact, claiming that Tana breached certain lease agreements by failing to pay royalties on gas-lift fees. [8] Tana did not claim below or on appeal that any member of the Class was contractually obligated to reimburse Tana's legal fees for successfully defending against an alleged breach of contract.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1911583/	104 B.R. 866 (1989) In re Richard W. BECKMAN, Nancy S. Beckman, Debtors. Larry E. STAATS, Trustee, Plaintiff, v. Richard W. BECKMAN, et al., Defendants. Bankruptcy No. 2-86-00126, Adv. Pro. No. 2-87-0278. United States Bankruptcy Court, S.D. Ohio, E.D. July 26, 1989. Larry E. Staats, Columbus, Ohio, trustee/plaintiff. Shirley C. Hansgen, Tanner & Mathewson, London, Ohio, for Richard and Nancy Beckman. Andrew W. Cecil, Columbus, Ohio, for Bankers Nat. Life Ins. Co. Charles M. Caldwell, Office of U.S. Trustee, Columbus, Ohio, Asst. U.S. Trustee. OPINION AND ORDER R. GUY COLE, Jr., Bankruptcy Judge. I. Preliminary Statement This matter is before the Court upon the Complaint for Money Judgment, Etc. Based on Fraudulent Transfer ("Complaint") filed by Larry E. Staats, the duly-appointed trustee in the Chapter 7 case of In re Richard W. and Nancy S. Beckman, Case No. 2-86-00126, ("Trustee"); the Answer thereto filed by Richard and Nancy Beckman ("Debtors"); and the parties' 867 joint request that this adversary proceeding be adjudicated upon stipulated facts and exhibits. Also before the Court for determination is the Trustee's Objection to Exemption Claim ("Objection") and Debtors' opposition thereto. The Objection was heard previously by the Court, but a ruling thereon was held in abeyance pending entry of a final judgment in this adversary proceeding. Jurisdiction over this case is vested in the Court pursuant to 28 U.S.C. § 1334(b) and the General Order of Reference entered in this judicial district. This adversary proceeding is a core matter which the Court may hear and determine. 28 U.S.C. § 157(b)(1) and (2)(B). The following Opinion and Order shall constitute the Court's findings of fact and conclusions of law pursuant to Bankruptcy Rule ("B.R.") 7052. II. Factual Background The parties have submitted joint factual stipulations which are set forth below verbatim: 1. It is hereby stipulated and agreed that prior to September, 1985, when the Defendants, Richard and Nancy Beckman, first consulted an attorney concerning their financial situation, they believed that they collectively owned assets worth in excess of $3,000,000.00 and that their joint net worth was in excess of $1,500,000.00. After consulting with their attorney and having their assets appraised, it became apparent during October of 1985 that they had a negative net worth, i.e., were insolvent, and that Bankruptcy was inevitable. 2. In December, 1985, and at the time of filing of the petition in Bankruptcy herein, Richard W. Beckman had the following life insurance coverage: (a) Bankers National Life Insurance Co. (1) Term policy No. 450-148 purchased in 1984 .................. $200,000.00 (2) Term policy ... [-] No. 590-673 purchased in 1984 .................. $100,000.00 (b) Security Mutual Life Insurance Co. (1) Whole Life Policy, No. [unknown] purchased in [date unknown] ............... $10,000.00 (c) A group accidental life insurance policy (company, number, and date of purchase unknown) .................... $100,000.00 (d) Credit Life Insurance covering the Nazarine Credit Union debt of [approximately] ...... $14,000.00 3. On December 12, 1985, Richard W. Beckman signed an application to purchase $100,000.00 worth of additional life insurance from Bankers National Life Insurance Co. On December 21, 1985, Nancy W. Beckman signed an application to purchase $100,000.00 worth of life insurance with Bankers National Life Insurance Co. Copies of the policies issued with copies of said applications being a part thereof are attached hereto and marked Exhibit B and Exhibit C. 4. On January 11, 1986, Richard W. Beckman delivered $15,000.00 cash to an agent of Bankers National Life Insurance Co. as the initial premium on the policies intended to be issued in response to the applications referred to above, i.e., $10,000.00 on the policy to be owned by Dr. Beckman and $5,000.00 on the policy to be owned by Mrs. Beckman. A copy of said receipt is attached hereto and marked "Exhibit A". 5. The source of the funds used to pay the premiums was fees earned by Richard W. Beckman in his dentistry practice during the months of October, November, and December, 1985. 6. The Debtors signed their Chapter 7 Bankruptcy Petition on January 9, 1986, and the same was filed herein on January 14, 1986. 7. With the exception of the Credit Life insurance policies, the beneficiaries on all of the life insurance policies referred to above are either the Debtors or their children. 868 8. The parties further stipulate that the original petition and schedules filed hereto [sic] by Richard and Nancy Beckman may be considered by the Court as evidence herein. The parties also stipulate that the typed transcript of the "Deposition" of Richard Beckman taken on May 7, 1987, a copy of which is attached hereto and marked "Exhibit D", and the transcript of testimony of Richard Beckman, a copy of which is attached hereto and marked "Exhibit E", presented in the hearing conducted on September 1, 1987, on the Trustee's Objection to exemptions [sic] may also be considered as evidence herein. 9. The cash surrender value of the two life insurance policies in question, on the day of filing of the petition in Bankruptcy by Richard and Nancy Beckman, was as set forth in the attachment ("Exhibit F") to a letter dated October 20, 1986, addressed to Larry E. Staats, from Brian J. Cheney, Assistant Counsel for Bankers National Life Insurance Company, i.e. $9,764.87 for Dr. Beckman's policy and $4,873.45 for Mrs. Beckman's policy. 10. That the parties have entered into an agreement with Bankers National Life Insurance Co., a copy of which is attached hereto and marked "Exhibit G", and expect shortly to submit a proposed Order removing said insurance company as a party herein. 11. The above facts are hereby stipulated [sic] to be true for purposes of this Court deciding the issues in this adversary proceedings. The documents attached hereto are hereby stipulated to be true and accurate copies of the originals and that said documents are evidence herein. The parties further stipulated [sic] and agree that the Exhibit E, which is a transcript of tesimony [sic] given by Dr. Beckman before this Court on a previous occasion contains errors in transcription which may be referred to by either of the parties in briefs to be filed hereafter. III. Arguments of the Parties Against the backdrop of the foregoing stipulated facts and exhibits the parties have asserted the legal arguments summarized below. The Trustee argues as follows: (1) Debtors' purchase of the whole-life insurance policies (the "Insurance Purchase") from Bankers National Life Insurance Co. ("Bankers") was made with actual intent to hinder, delay and defraud the creditors of the estate; therefore, the transaction is avoidable as a fraudulent transfer pursuant to 11 U.S.C. § 548(a)(1); (2) The Insurance Purchase constitutes a fraudulent conveyance under state law, specifically, Ohio Revised Code ("O.R.C.") § 1313.56, and is subject to avoidance by the Trustee under 11 U.S.C. § 544(a); (3) Because Richard Beckman received less than reasonably equivalent value in exchange for his payment of the $5,000 premium to Bankers for Nancy Beckman's $100,000 whole-life policy (the "$5,000 Transfer"), pursuant to 11 U.S.C. § 548(a)(2), the $5,000 Transfer may be avoided; and (4) The whole-life policies issued to Debtors by Bankers (the "Policies") are not properly exemptible under Ohio law inasmuch as the Insurance Purchase was made in fraud of Debtors' creditors within the meaning of O.R.C. § 3911.10. Debtors respond by arguing that it was perfectly proper and, hence, not fraudulent, to convert non-exempt cash to exempt property the Policies[1] on the eve of bankruptcy. Further, according to Debtors, the Insurance Purchase was made merely to "provide for each other and their children in the event that one or both of them died. . . ." Debtors' Brief at 5. For these reasons, Debtors submit that because the Insurance Purchase was not fraudulent under either federal or state law the transfer of $15,000 in cash to Bankers is not avoidable. Further, the Policies should be declared exempt, Debtors claim, since the Insurance 869 Purchase was not made in fraud of their creditors within contemplation of O.R.C. § 3911.10. IV. Legal Discussion A. Fraudulent Transfer The Trustee maintains the Insurance Purchase was undertaken with actual intent to hinder, delay and defraud the creditors of the estate, thereby rendering the transaction avoidable pursuant to 11 U.S.C. § 548(a)(1). This provision states: (a) The trustee may avoid any transfer of an interest of the debtor in property, or any obligation incurred by the debtor, that was made or incurred on or within one year before the date of the filing of the petition, if the debtor voluntarily or involuntarily (1) made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that such transfer was made or such obligation was incurred, indebted; . . . . 11 U.S.C. § 548(a)(1). The issue for decision, then, is whether Debtor's eve-of-bankruptcy conversion of non-exempt cash into exempt life insurance policies constitutes fraudulent conduct or merely prudent pre-bankruptcy planning. Considerable debate in the case law has been engendered by pre-bankruptcy engineeringi.e., the practice of converting non-exempt property to exempt property in contemplation of filing a bankruptcy case. Compare Hanson v. First Nat'l Bank in Brookings, 848 F.2d 866 (8th Cir.1988) (allowing claimed exemption of property which was converted from non-exempt property shortly before bankruptcy was filed) and Marine Midland Business Loans, Inc. v. Carey (In re Carey), 96 B.R. 336 (Bankr.W.D.Okla.1989) (holding that extensive pre-bankruptcy planning through which debtor placed nearly $180,000 beyond the reach of her creditors during 21-month period immediately preceding petition date was not fraudulent) with Norwest Bank Nebraska, N.A. v. Tveten, 848 F.2d 871 (8th Cir.1988) (denying discharge to debtor who converted non-exempt property into exempt property) and In re Summers, 85 B.R. 121 (Bankr.D.Or.1988) (disallowing exemption on ground that eve-of-bankruptcy transfers of property from non-exempt to exempt status were fraudulent). Prebankruptcy planning likewise has spawned a number of scholarly articles. See Resnick, Prudent Planning or Fraudulent Transfer? The Use of Non Exempt Assets to Purchase or Improve Exempt Property on the Eve of Bankruptcy, 31 Rutgers L.Rev. 615 (1978); Note, Section 522 Exemptions: A Look at the Individual Debtor's Reduction of the Bankruptcy Estate, 5 Bankr.Dev.J. 131, 142-148 (1987); Koger and Reynolds, Is Prefiling Engineering Prudent Planning or Section 727 Fraud? (Or, When Does a Pig Become a Hog?), 93 Com.L.J. 465 (1988). The general rule which has emerged from the decisional law is that mere conversion of property from non-exempt to exempt status on the eve of bankruptcy does not establish fraud. See First Texas Savings Assoc., Inc. v. Reed (In re Reed), 700 F.2d 986 (5th Cir.1983); Armstrong v. Lindberg (In re Lindberg), 735 F.2d 1087 (8th Cir.), cert. denied sub nom. Armstrong v. Lindberg, 469 U.S. 1073, 105 S.Ct. 566, 83 L.Ed.2d 507 (1984); Daniel v. Security Pacific Nat'l Bank (In re Daniel), 771 F.2d 1352 (9th Cir.1985); Ford v. Poston (In re Ford), 773 F.2d 52 (4th Cir. 1985); Tveten, 848 F.2d at 873-74; Smiley v. First Nat'l Bank of Belleville (In re Smiley), 864 F.2d 562 (7th Cir.1989); Thorp Credit, Inc. of Ohio v. Saunders (In re Saunders), 37 B.R. 766 (Bankr.N.D. Ohio 1984); Panuska v. Johnson (In re Johnson), 80 B.R. 953 (Bankr.D.Minn. 1987).[2] The legislative history to 11 U.S.C. 870 § 522(b) which sets forth a debtor's available exemptions in a Chapter 7 proceedingsupports a debtor's right to exemption planning, stating: "As under current law, the debtor will be permitted to convert nonexempt property into exempt property before filing a bankruptcy petition. The practice is not fraudulent as to creditors, and permits the debtor to make full use of the exemptions to which he is entitled under the law." H.R.Rep. No. 595, 95th Cong., 1st Sess. 361 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News. 5963, 6317; S.Rep. No. 989, 95th Cong., 2d Sess. 76 (1978), reprinted in 1978 U.S.Code Cong. & Admin.News 5787, 5862. While eve-of-bankruptcy conversion of non-exempt property to exempt property alone is not fraudulent as to creditors, if extrinsic evidence of intent to defraud creditors is adduced, courts have: (1) disallowed the debtor's exemption claim; (2) held that the pre-bankruptcy transactions constitute avoidable fraudulent transfers under 11 U.S.C. § 548(a)(1); or (3) denied the debtor a discharge pursuant to 11 U.S.C. § 727(a)(2)(A). See Tveten, 848 F.2d at 874; Mueller v. Redmond (In re Mueller), 867 F.2d 568, 570 (10th Cir.1989); Federal Savings & Loan Ins. Corp. v. Holt (In re Holt), 97 B.R. 997, 1000 (W.D. Ark.1988); Samore v. Breuer (In re Breuer), 68 B.R. 48, 51 (Bankr.N.D.Iowa 1985); Summers, 85 B.R. at 126; Gayl v. Shader (In re Shader), 90 B.R. 85, 88 (Bankr.D.Del.1988). Hence, the Court must determine here whether the Trustee has shown the existence of extrinsic evidence of fraud i.e., evidence demonstrating that the Insurance Purchase was made with the intent to hinder, delay or defraud Debtors' creditors. Proof of such fraudulent intent on Debtors' part would render the transaction avoidable under § 548(a)(1) of the Bankruptcy Code. Among the circumstances which courts focus upon in determining a debtor's intent in purchasing exempt life insurance on the eve of bankruptcy are the following: (1) whether there was fair consideration paid for the life insurance policy; (2) whether the debtor was solvent or insolvent as a result of the transfer or whether he was insolvent at the time of the transfer; (3) the amount of the policy; (4) whether the debtor intended, in good faith, to provide by moderate premiums some protection to those to whom he had a duty to support; (5) the length of time between the purchasing of a life insurance policy and the filing of the bankruptcy; (6) the amount of non-exempt property which the debtor had after purchasing the life insurance policy; (7) the debtor's failure to produce available evidence and to testify with significant preciseness as to the pertinent details of his activities shortly before filing the bankruptcy petition. Mueller, 867 F.2d at 570; Matter of Mehrer, 2 B.R. 309, 312 (Bankr.E.D.Wash.1980) (decided under the Bankruptcy Act); Peoples State Bank & Trust Co. v. Sayler (In re Sayler), 68 B.R. 111, 121 (Bankr.D.Kan. 1986), rev'd on other grounds, 98 B.R. 536 (D.Kan.1987); Summers, 85 B.R. at 126. Utilizing the foregoing factors as a guide, the Court concludes that in carrying out the Insurance Purchase the Debtors intended to defraud their creditors. The factors delineated in paragraphs (2), (5) and (6) of the above list are clearly present here. Debtors converted all of their remaining non-exempt property (¶ 6) two days before their bankruptcy petition was filed (¶ 5) and while they were admittedly insolvent (¶ 2). While the presence of these three factors is significant, they do not, standing alone, establish extrinsic evidence of fraud. Indeed, such factors will be present in virtually every instance where pre-bankruptcy planning is undertaken. 871 Here, however, there is further, compelling extrinsic evidence of fraud. The amount of insurance purchased by Debtors (¶ 5) likewise evinces a fraudulent purpose on their part. Richard Beckman maintained $300,000 in term life insurance; $100,000 in accidental life insurance; $10,000 in whole life insurance; and $14,000 in credit life insurance at the time the Policies were purchased. Yet, notwithstanding such a substantial amount of life insurance coverage, debtors consummated the Insurance Purchase a mere three days prior to their bankruptcy filing. Debtors maintain this additional protection was necessary for the security of their family. But, having considered the record as a whole, including Richard Beckman's courtroom demeanor, the Court concludes that his testimony is simply not credible. To purchase an additional $200,000 in life insurance on the eve of bankruptcy and pre-pay the premiums thereon so that the cash surrender value of the Policies would be obtainable by Debtors upon termination of their bankruptcy proceeding goes far beyond "[providing] in good faith . . . by moderate premiums some protection to those to whom . . . [Debtors] had a duty to support." Mehrer, 2 B.R. at 312; Summers, 85 B.R. at 126. Perhaps the most telling indicator of Debtors' fraudulent intent is their attempted concealment or, at best, obfuscation of the Insurance Purchase in their bankruptcy petition and accompanying schedules. Where pre-bankruptcy planning is accompanied by concealment or conduct calculated to mislead creditors, fraudulent intent will be inferred. See Reed, 700 F.2d at 991-92; McCormick v. Security Bank, 822 F.2d 806, 808 (8th Cir.1987). That Debtors engaged in such deceptive conduct by failing to disclose fully their ownership interest in the Policies is readily apparent from a review of their bankruptcy schedules. At the time Debtors signed the schedules, they possessed $15,000 in undisclosed cash. Between the date the petition was signed and its filing date, Debtors transferred the $15,000 in payment of the Policies. While Debtors' nondisclosure of the $15,000 is susceptible to explanation given their knowledge that this sum would be paid Bankers prior to the petition date Debtors' concomitant failure to disclose accurately the existence of the Policies manifests an intent to mislead their creditors. The schedules contemplate disclosure of interests in insurance policies in two places: (1) on line B-2/r of the "Summary of debts and property" schedule, which is captioned "Interests in insurance policies"; and (2) on line R of the schedule of Personal Property (B-2), which also is entitled "Interests in insurance policies." Yet, Debtors' only references in the schedules to their ownership of the Policies are oblique ones. Debtors completely omitted the Policies from the "Summary of debts and property" schedule. See Appendix "A". Debtors did include the phrase "life insurance policies" within their schedule of personal property (Schedule B-2). But, the manner of disclosure again suggests an attempt to conceal or obscure their ownership of the Policies. Debtors did not list the Policies in the correct place on line R of Schedule B-2. Rather, reference to the Policies was made on line P under the heading "Other liquidated debts owing debtor." See Appendix "B". Significantly, while line R of Schedule B-2 specifically directed Debtors to "itemize, surrender or refund values of each [policy]," Debtors failed to disclose the cash surrender value of the Policies. To summarize, a review of Debtors' schedules in their entirety reveals a woefully incomplete disclosure of the nature of Debtors' property interest in the Policies. Viewed positively, Debtors' nondisclosures evidence a reckless disregard for the accuracy and completeness of their bankruptcy schedules. Viewed more dimly, this lack of disclosure constitutes deliberate concealment of their ownership of the Policies. In any event, the schedules filed by Debtors are materially omissive and suggest Debtors intended to mislead their creditors with respect to their prepetition conversion of the non-exempt $15,000 in cash to the exempt Policies. In sum, based upon the totality of the facts and circumstances presented in this case, and particularly Debtors' failure to 872 disclose fully and accurately the Policies in their schedules, the Court concludes that the Trustee has demonstrated the existence of fraudulent intent on Debtors' part. Accordingly, the Insurance Purchase is subject to avoidance pursuant to 11 U.S.C. § 548(a)(1). As stated above, the Trustee also asserts that he may utilize the "strong-arm" powers granted by 11 U.S.C. § 544(a) to avoid the Insurance Purchase under Ohio law. Specifically, the Trustee submits that the Insurance Purchase constitutes a fraudulent conveyance as defined in O.R.C. § 1313.56. Having ruled that the Insurance Purchase is an avoidable fraudulent transfer under 11 U.S.C. § 548(a)(1), it is unnecessary for the Court to address the Trustee's alternative argument i.e., that the Insurance Purchase also is subject to avoidance under § 544(a) of the Bankruptcy Code. B. The $5,000 Transfer Having determined that the Insurance Purchase is an avoidable fraudulent transfer the Court need not dwell at length on the Trustee's contention that a component thereof the $5,000 Transfer is subject to avoidance on an alternative ground. According to the Trustee, because Richard Beckman received no consideration from Nancy Beckman in exchange for his purchase of a $100,000 whole-life policy for her,[3] the $5,000 may be avoided pursuant to 11 U.S.C. § 548(a)(2).[4] The $5,000 Transfer is not avoidable under § 548(a)(2), Debtors submit, because Bankers the recipient of the $5,000 Transfer received full and fair consideration in exchange for its issuance of the $100,000 whole-life policy to Nancy Beckman. As is demonstrated below, Debtors' interpretation of § 548(a)(2) is both facile and erroneous. Richard Beckman's failure to receive equivalent value from his spouse in exchange for the purchase of her policy renders the $5,000 Transfer avoidable under § 548(a)(2) of the Code. The Trustee's position can be best articulated in two stages. First, while Bankers was the direct transferee of $5,000 from Richard Beckman, the Trustee argues, Nancy Beckman was the actual beneficial recipient i.e., she became the owner[5] of a $100,000 whole-life policy having a cash surrender value of $4,873.45 as of the petition date. Trustee's Brief at 2-4. From this starting point, the Trustee reasons that Richard Beckman's failure to receive consideration from his wife in exchange for the purchase of her policy allows for avoidance of the $5,000 Transfer. Id. As shown below, the Trustee's argument is meritorious. Three-sided transactions, such as that presented here, create special difficulties in determining "reasonably equivalent value" for purposes of § 548(a)(2). As a general rule, "[i]t may be said that . . . an insolvent debtor receives `less than a reasonable 873 equivalent value' where it transfers its property in exchange for a consideration which passes to a third party. In such a case, it ordinarily receives little or no value." Garrett v. Falkner (In re Royal Crown Bottlers of North Alabama, Inc.), 23 B.R. 28, 30 (Bankr.N.D.Ala.1982); Ear, Nose & Throat Surgeons of Worcester, Inc. v. Guaranty Bank & Trust Co. (In re Ear, Nose & Throat Surgeons of Worcester, Inc.), 49 B.R. 316, 320 (Bankr. D.Mass.1985). The Court must ascertain whether the consideration given to the third person "ultimately land[ed] in the debtor's hands or otherwise confer[red] an economic benefit upon the debtor. . . ." See In Re Corporate Jet Aviation, Inc., 45 B.R. 629, 636 (Bankr.N.D.Ga.1985). The value of the benefit received by the debtor must approximate the value of the property transferred by the debtor. Id. Here, an analysis of the impact of this trilateral transaction clearly reveals that Richard Beckman failed to receive equivalent value in exchange for his purchase of the whole life policy for his spouse. In fact, the transfer appears to have been completely gratuitous. As such, it constitutes an avoidable fraudulent transfer under 11 U.S.C. § 548(a)(2). C. The Exemption Claim Debtors claim an exemption in the Policies pursuant to O.R.C. §§ 2329.66(A)(6)(b) and 3911.10. O.R.C. § 2329.66(A)(6)(b) states: (A) Every person who is domiciled in this state may hold property exempt from execution, garnishment, attachment, or sale to satisfy a judgment or order, as follows: . . . . (b) The person's interest in contracts of life or endowment insurance or annuities, as exempted by section 3911.10 of the Revised Code;. . . . O.R.C. § 3911.10 provides in pertinent part as follows: All contracts of life or endowment insurance or annuities upon the life of any person, or any interest therein, which may hereafter mature and which have been taken out for the benefit of, or made payable by change of beneficiary, transfer, or assignment to, the spouse or children, or any relative dependent upon such person, or any creditor, or to a trustee for the benefit of such spouse, children, dependent relative, or creditor, shall be held, together with the proceeds or avails of such contracts, subject to a change of beneficiary if desired, free from all claims of the creditors of such insured person or annuitant. Subject to the statute of limitations, the amount of any premium upon said contracts, endowments, or annuities, paid in fraud of creditors, with interest thereon, shall inure to their benefit from the proceeds of the contracts,. . . . The Trustee contests Debtors' claim of exemption in the Policies, arguing that Debtors' payment of the premiums thereon was "in fraud of creditors" within the meaning of O.R.C. § 3911.10. Debtors vigorously dispute this contention. Because their intent in obtaining the Policies was merely to provide protection to their family, Debtors maintain, the Insurance Purchase was not fraudulent as to their creditors. Therefore, Debtors submit that their claimed exemption is proper and should be sustained. The phrase "paid in fraud of creditors" contained in the Ohio exemption statute was analyzed by the Sixth Circuit in Doethlaff v. Penn Mut. Life Ins. Co., 117 F.2d 582 (6th Cir.1941).[6] There, the debtor had been paying premiums on a life insurance policy for ten years. During the last four years of this ten-year period (the four years preceding debtor's bankruptcy filing) the debtor was insolvent. Noting the dearth of Ohio case law interpreting the phrase "in fraud of creditors," the Sixth Circuit stated: [The statute] does not define the phrase "in fraud of creditors." 874 .... We are left therefore to our own view of the law and it must be kept in mind that we are dealing with an exemption statute which is entitled to a construction liberal to the debtor. We think its meaning is that creditors have a remedy where premiums have been paid with intent to delay, hinder and defraud them and that the question of intent is one of ultimate fact to be determined upon a consideration of the attending facts and circumstances, such as the question of the insolvency of the insured, his attitude toward his debts, the amounts thereof, his prospective ability to liquidate them, whether the policy was issued before or after insolvency, its cash surrender value; and finally, whether after all he, in good faith, intended to provide by moderate premiums some protection to those who had a natural claim upon his bounty. 117 F.2d at 584. The Sixth Circuit's application of the foregoing criteria led it to conclude that debtor's claim of exemption in the life insurance policy should be sustained. In upholding the debtor's exemption claim the Doethlaff court stressed that there was "no evidence to indicate any actual intention upon the part of the insured [the debtor] to defraud his creditors. . . ." Id. Presumably, this conclusion was based largely on the fact that the life insurance policies had been obtained by the debtor well in advance of bankruptcy (ten years before) and the premiums paid thereon were moderate. The Doethlaff list is substantially the same as the criteria applied by this Court in concluding that the Insurance Purchase is subject to avoidance as a fraudulent transfer. See discussion, supra, at 10-15. The Court need not restate that analysis here. Suffice it to say that the evidence which established the existence of a fraudulent transfer under 11 U.S.C. § 548(a)(1) likewise compels the conclusion that the Insurance Purchase was made "in fraud of creditors" within the meaning of O.R.C. § 3911.10. Id. Based upon the foregoing, the Court hereby ORDERS as follows: (1) Judgment in favor of the Trustee on all counts of the Complaint shall be entered forthwith; and (2) The Trustee's Objection to Exemption Claim is hereby SUSTAINED. IT IS SO ORDERED. 875 APPENDIX A 876 APPENDIX B NOTES [1] Debtors claim the Policies exempt under O.R.C. §§ 2329.66(A)(6)(b) and 3911.10. These statutory provisions are set forth and discussed, infra, at 18-21. [2] Many of the cases cited above involve the issue of whether a debtor's pre-bankruptcy conversion of non-exempt property to exempt property constitutes conduct intended to hinder, delay or defraud creditors so as to preclude the granting of a discharge in a Chapter 7 or 11 case. See 11 U.S.C. § 727(a)(2). However, because the "hinder, delay or defraud" language of 11 U.S.C. § 727(a)(2)(A) is identical to that contained in the fraudulent transfer provision 11 U.S.C. § 548(a)(1) the analysis employed in the above cases is virtually identical to that utilized by courts facing the present issue, viz., whether pre-bankruptcy conversion of non-exempt to exempt property is fraudulent for purposes of § 548(a)(1). See Federal Savings & Loan Ins. Corp. v. Holt (In re Holt), 97 B.R. 997 (W.D.Ark. 1988); Samore v. Breuer (In re Breuer), 68 B.R. 48 (Bankr.N.D. Iowa 1985); and Gayl v. Shader (In re Shader), 90 B.R. 85 (Bankr.D.Del.1988). [3] The evidence establishes that the funds utilized to purchase Nancy Beckman's policy were derived from Richard Beckman's dental practice. Ohio law explicitly leaves property rights unaltered by the fact of marriage: "Neither husband nor wife has any interest in the other, except [implicit in the duty to support], the right to dower, and the right to remain in the mansion house after the death of either." Butz v. Wheeler (Matter of Wheeler), 17 B.R. 85, 88 (Bankr.S.D. Ohio 1981) (quoting O.R.C. § 3103.04). Thus, the cash paid to Bankers in exchange for issuance of Nancy Beckman's policy was the property of Richard Beckman. [4] 11 U.S.C. § 548(a)(2) states: (a) The trustee may avoid any transfer of an interest of the debtor in property, or any obligation incurred by the debtor, that was made or incurred on or within one year before the date of the filing of the petition, if the debtor voluntarily or involuntarily . . . . (2) (A) received less than a reasonably equivalent value in exchange for such transfer or obligation; and (B) (i) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation;. . . . [5] Pursuant to the terms of the whole-life policy, the insured Nancy Beckman is designated as the owner of the policy unless "stated otherwise in the application. . . ." Exhibit C at 11. Because the aplication did not state otherwise, see Exhibit C at 5, Nancy Beckman became the owner of the $100,000 whole life policy with a $4,873.45 cash surrender value by virtue of the $5,000 Transfer. [6] In Doethlaff, the Sixth Circuit interpreted the predecessor statute of O.R.C. § 3911.10 former Ohio General Code § 9394. Ohio General Code § 9394 was simply recodified as O.R.C. § 3911.10 and was identical in all material respects to the exemption provision at issue here.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1908218/	950 So.2d 55 (2007) Rita H. Holzenthal Wife of/and Henry HOLZENTHAL, III, Gretel Holzenthal, Cecelia M. Holzenthal Wife of/and Henry W. Holzenthal, Patricia A. Stanley Wife of/and George E. Thomas, and Monica S. Espinel Wife of/and Luis F. Espinel v. SEWERAGE & WATER BOARD OF NEW ORLEANS. Carlo R. Galan, M.D., Gwendolyn D. Redus, Billye B. Ber and Maxine Miller v. Sewerage & Water Board of New Orleans. Jean Feran Wife of/and Fred Feran, Mary Susan Hunt, Mary Sharett Wife of/and Freddie Sharett, Penelope Sheffield, Elise A. Boyer and Cheryl L. Squire v. Sewerage & Water Board of New Orleans. Nos. 2006-CA-0796, 2006-CA-0797, 2006-CA-0798. Court of Appeal of Louisiana, Fourth Circuit. January 10, 2007. 59 Stephen B. Murray, Jr., Murray Law Firm, New Orleans, LA, Linda S. Harang, Law Offices of Linda S. Harang, L.L.C., Jefferson, LA, for Plaintiffs/Appellees. James B. Irwin, David W. O'Quinn, Irwin Fritchie Urquhart & Moore LLC, New Orleans, LA, for Sewerage and Water Board of New Orleans. Harry J. "Skip" Phillips, Jr., Margaret L. Tooke, Taylor, Porter, Brooks & Phillips, L.L.P., Baton Rouge, LA, for Fidelity & Guaranty Insurance Company. Betty F. Mullin, Herman C. Hoffmann, Jr., Simon Peragine Smith & Redfearn L.L.P., New Orleans, LA, for James Construction Group, L.L.C. Terrence L. Brennan, Keith J. Bergeron, Deutsch, Kerrigan & Stiles, L.L.P., New Orleans, LA, for Schrenk & Peterson Consulting Engineers, Inc. and Security Insurance Company of Hartford. Joseph G. Gallagher, Jr., Hulse & Wanek, New Orleans, LA, David J. Bourgeois, Duplass Zwain Bourgeois Morton Pfister & Weinstock, Metairie, LA, for Brown, Cunningham & Gannuch, Inc. Court composed of Chief Judge JOAN BERNARD ARMSTRONG, Judge MICHAEL E. KIRBY and Judge MAX N. TOBIAS JR. JOAN BERNARD ARMSTRONG, Chief Judge. This case involves three groups of homeowners who claim that their homes were damaged during the course of construction of the Southeast Louisiana Urban Drainage Project ("Project"). The purpose of the Project was to increase substantially drainage capacity in portions of New Orleans. The Project included, among other works, the construction of a box culvert underground drainage canal located in the median of Napoleon Avenue in New Orleans. It is uncontested that the project was controlled by the United States Army Corps of Engineers (ACOE), which funded 75% of its cost. The New Orleans Sewerage and Water Board (SWB) was the local sponsor of the Project and funded the remaining 25% of its cost. The plaintiff homeowners sued SWB, and SWB filed third party actions against Schrenk & Peterson Consulting Engineers, Inc. (S & P), its insurer, Security Insurance Company of Hartford (Security), Fidelity & Guaranty Insurance Company (Fidelity), insurer of SWB's engineering consultant, Brown, Cunningham and Ganuch, Inc. (Brown) and James Construction Group, L.L.C. (James). SWB claimed that S & P was contractually required to defend, indemnify and hold harmless SWB from claims arising from the Project to the extent that such claims were caused by S & P's negligent acts, errors or omissions in the performance of professional services pursuant to SWB's contract with S & P. SWB claimed that James' tortious conduct or violation of provisions 60 of its contract with ACOE caused the homeowners' damages. SWB claimed that Fidelity, as insurer of its consulting engineer, owed it a duty to defend the homeowners' suits and owed it coverage as an additional insured under Fidelity's policy with the engineering firm. The plaintiffs sued only SWB, and made no claims against the contractors or their insurers. SWB's claims against its own insurers were severed, and the remaining claims proceeded to a bench trial. At the conclusion of the presentation of SWB's case, the trial court granted motions for involuntary dismissal made by S & P and its insurer, Security; by Fidelity and by James. On March 10, 2005, the trial court granted judgment denying SWB's Motion for New Trial of the trial court's ruling granting a motion to dismiss at the close of SWB's evidence in favor of Brown and Continental Casualty Company. On March 10, 2006, the trial court granted judgment denying SWB's Motion for New Trial of the trial court's ruling granting a motion to dismiss at the close of SWB's evidence in favor of S & P and Security. On March 10, 2006, the trial court granted judgment denying SWB's Motion for New Trial of the trial court's ruling granting a motion to dismiss at the close of SWB's evidence in favor of James. On March 10, 2006, the trial court granted judgment denying SWB's Motion for New Trial of the trial court's ruling granting a motion to dismiss at the close of SWB's evidence in favor of Fidelity. The trial court correctly noted in its reasons for judgment that the disposition of the foregoing third-party claims has no bearing on the grounds for liability asserted by the plaintiffs against SWB. On July 20, 2005, the trial court rendered judgment in favor of the plaintiff homeowners as follows: In favor of Rita and Henry Holzenthal, III and against SWB in the amounts of $379,805.06 for property damage; $15,825 for moving and storage costs, and $15,000 for emotional distress, plus court costs and interest from the date of judicial demand; In favor of Carlo R. Galan, M.D. and against SWB in the amounts of $330,983.14 for property damage; $12,500 for moving and storage costs, $25,000 for emotional distress and $13,870 for personal property damage, plus court costs and interest from the date of judicial demand; and In favor of Jean and Fred Feran and against SWB in the amounts of $246,936.10 for property damage, $18,650 for moving and storage expenses, $2,435 for out of pocket repair cost, $25,000 for emotional distress and $6,500 for damages to personal property, plus court costs and interest from the date of judicial demand. SWB appeals from the foregoing judgments in favor of the plaintiffs and denying its motions for new trial of the trial court's directed verdicts on SWB's third party demands. For the reasons that follow, we affirm the aforementioned judgments. The trial court adopted extensive findings of fact and reasons for judgment. In the mid- to late-1990s, SWB began to discuss plans for improving drainage in the Broadmoor neighborhood, where the plaintiffs' homes were located. The primary feature of this project would be installation of a large underground box culvert under the Napoleon Avenue median to be part of the larger ACOE/SWB Project to improve drainage in Southeast Louisiana. On January 22, 1996, following a joint feasibility study by ACOE and SWB, those parties entered into a Project Cooperation Agreement for the construction of the box 61 culvert. SWB then entered into various service agreements with contractors to assist SWB in fulfilling its responsibilities under the agreement with ACOE. The Napoleon Avenue project consisted of two phases: (1) work primarily at the "Y" intersection of Fontainebleu Drive, South Broad Street and Napoleon Avenue, and a short distance along the Avenue median to a point just north of South Dorgenois Street, and (2) work from the south end of Phase 1 along Napoleon Avenue's median to a point just north of South Claiborne Avenue. The Feran plaintiffs and Dr. Galan own and reside in homes fronting on Napoleon Avenue, and the Holzenthal plaintiffs lived within one block of the "Y" intersection at the north end of Napoleon Avenue. Dewatering in connection with Phase 1 began in May, 2000 and continued until March, 2001. Phase 1 driving of steel sheet piles and timber piles began several months prior to dewatering. Phase 2 pile driving began in Spring of 2001 and Phase 2 dewatering began in July, 2001. The plaintiffs claim that their homes were damaged as a result of the Napoleon Avenue drainage construction project, having suffered significant settlement and/or vibration damage as a result of the effects of dewatering, steel sheet pile driving, timber pile driving and movement of heavy equipment including cranes, pile driving hammers, excavation equipment, trucks, tractors and other heavy machinery. The sheet pile driving was accomplished using ordinary pile driving cranes and vibratory hammers to drive the steel sheet piles to a depth of between 25 and 30 feet below the surface, and then later using the same equipment to remove the steel sheet piles. The timber pile driving work was accomplished using ordinary pile driving equipment to drive timber piles to a depth of more than 35 feet below the bottom of the excavated site in order to support the poured concrete box culvert. The trial court concluded that SWB is liable to each of the plaintiffs for the full costs of repair to their homes caused by the Project, together with the full cost of repair or replacement of their damaged personal property and reasonable damages for the emotional distress each suffered as a result of the Project. The gravamen of the liability case is that the damages sustained by the plaintiffs were the necessary consequence of the Project, and that the Project was undertaken for a valid public purpose. An additional ground for liability is found in the ultrahazardous pile-driving activity that causally contributed to the plaintiffs' damages. The plaintiffs do not allege that any of the contractors on the Project deviated from accepted practice or from the Project's plans and specifications. The trial court noted that underlying all of SWB's arguments with respect to liability is its repeated assertion, made likewise on appeal, that the Project is not SWB's project because the construction was directly supervised by entities other than SWB. It asserts it was merely a "local sponsor" of the Project and that it contracted away to third parties any responsibility it otherwise would have had for damages caused by the Project. The trial court rejected this basic argument, finding that as a matter of law, SWB could not and did not contract away the duties it owed the plaintiffs. The court also found, as a matter of fact, that SWB "showcased" the Project as an SWB project. The trial court noted in its findings of fact that SWB claimed the Project as its own throughout its existence, at least until litigation against it commenced. Large signage along South Claiborne and Napoleon Avenues "boldly proclaimed that the 62 SELA project was a project of the Board." In smaller print, the signs explained that construction of the project would be supervised by ACOE. The court observed that the Project could not begin or proceed without SWB's approval, according to the testimony of SWB's General Superintendent, G. Joseph Sullivan. Exhibit JT-2, the Project Cooperation Agreement between SWB and ACOE, provides that SWB is vested with rights of comment and participation before and throughout the Project. Furthermore, the Project was connected to SWB's infrastructure and, at the conclusion of construction, existed as SWB property on SWB servitudes and easements. Likewise, Exhibits JT-3, the SWB/ Brown contract, and JT-4, the SWB/S & P contract, provided that SWB would have the final right of approval over the contractors' activities. The trial court found that, based on the testimony of Mr. Sullivan, SWB monitored all design and construction activities throughout the Project, and SWB personnel from SWB's Network Engineering Department regularly participated in meetings with contractors and ACOE before and throughout the construction. The trial court also referred in its written reasons for judgment to Mr. Sullivan's correspondence to D.J. Webre, stating: The Sewerage and Water Board will have input to the plans and specifications for drainage design and the Sewerage and Water Board will have representatives on site during construction to assist in making certain the contract plans and specifications are followed. The trial court concluded that for purposes of considering the plaintiffs' claims for inverse condemnation and for strict liability under La.C.C. art. 667, "no one can credibly deny that the Napoleon Avenue covered canal project was, as the sign said, the `Sewerage and Water Board of New Orleans Napoleon Avenue Covered Canal.' We find that conclusion to be supported by the record." SWB contends that the trial court judgment in favor of the plaintiffs erroneously imposed liability under a theory of inverse condemnation. The Louisiana Constitution provided at the times relevant to this litigation: Every person has the right to acquire, own, control, use, enjoy, protect and dispose of private property. This right is subject to reasonable statutory restrictions and the reasonable exercise of the police power. Property shall not be taken or damaged by the state or its political subdivisions except for public purposes and with just compensation paid to the owner or into court for his benefit. Property shall not be taken or damaged by any private entity authorized by law to expropriate, except for a public and necessary purpose and with just compensation paid to the owner; in such proceedings, whether the purpose is public and necessary shall be a judicial question. In every expropriation, a party has the right to trial by jury to determine compensation, and the owner shall be compensated to the full extent of his loss. . . . La. Const. Art. I, § 4; cited in Avenal v. State of Louisiana and Dept. of Natural Resources, 03-3521, pp. 25-26 (La.10/19/04), 886 So.2d 1085, 1103. The Constitution requires compensation even in those cases in which the State has not initiated expropriation proceedings in accordance with the statutory scheme set up for that purpose. State, Through Dept. of Transp. and Dev. v. Chambers Investment Company, Inc., 595 So.2d 598, 602 (La.1992). As the Louisiana Supreme Court noted in Chambers, it 63 is now hornbook law that any substantial interference with the free use and enjoyment of property may constitute a taking of property within the meaning of federal and state constitutions. Id. The court held: Although the legislature has not provided a procedure whereby an owner can seek damages for an uncompensated taking or damaging, this court has recognized the action for inverse condemnation arises out of the self-executing nature of the constitutional command to pay just compensation. The action for inverse condemnation provides a procedural remedy to a property owner seeking compensation for land already taken or damaged against a governmental or private entity having the powers of eminent domain where no expropriation has commenced. The action for inverse condemnation is available in all cases where there has been a taking or damaging of property where just compensation has not been paid, without regard to whether the property is corporeal or incorporeal. Id. [Citations omitted.] The Louisiana Supreme Court, in its Avenal opinion, applied the three-prong analysis set forth in Chambers, supra, 595 So.2d at 603 to determine whether a claimant is entitled to eminent domain compensation: [T]he court must: (1) determine if a recognized species of property right has been affected; (2) if it is determined that property is involved, decide whether the property has been taken or damaged in a constitutional sense; and (3) determine whether the taking or damaging is for a public purpose under Article I, § 4. Id.; Constance v. State Through Dept. of Transp. and Development Office of Highways, 626 So.2d 1151, 1157 (La.1993) (using C.C. arts. 667 and 668, which impose legal limitations on a landholder's right of ownership, to consider whether property was taken or damaged under Art. I, § 4). Avenal, supra at pp. 26-27, 886 So.2d at 1104. In Avenal, the court held that the relevant consideration was whether the plaintiffs' property was "taken" for a public purpose or whether it was "damaged" for a public purpose. In that case, the distinction between a taking and a damaging was relevant because of differing prescriptive periods for actions arising out of those two causes of action. In the instant case, prescription is not an issue, so that the Avenal's critical distinction between "taking" and "damage" is not dispositive of these plaintiffs' claims. Whether plaintiffs' causes of action arose from a "taking of" or "damage to" their property, the suits on those causes of action were timely filed. The trial court in its reasons for judgment specifically and correctly applied the Chambers three-prong test to the plaintiffs' claims. SWB notes correctly that inverse condemnation is not a "catchall remedy" for tort damages sustained as a result of activities conducted by the sovereign. As noted in the third prong of the Chambers test, the state actor's activity must be in furtherance of a public purpose in order to satisfy the requirement for a finding of inverse condemnation. Our review of the jurisprudence relied upon by SWB does not support its conclusion that the Project was not a "public purpose" within the meaning of the Louisiana Constitution and jurisprudence. In Angelle v. State of Louisiana, 212 La. 1069, 34 So.2d 321 (1948), a disinfection spraying program allegedly caused a fire that destroyed the plaintiff's property. The court noted 64 [the] distinction between the destruction and damaging of private property by agents of the State while engaged merely in the performance of a governmental function and the deliberate taking or necessary damaging for the public use and benefit. In the first instance, the destruction or damage occurs not for a public purpose but by reason of the negligence of the state officer or agents. In the latter the property is taken or damaged under the power of eminent domain; it is an appropriation for public purposes for which adequate compensation is guaranteed to the owner. . . . 212 La. at 1077-78, 34 So.2d at 323-24. The Angelle case might have been helpful to SWB had there been a preponderance of evidence of negligence on the part of the engineers or contractors. However, the trial court did not find negligence, and our independent review of the record in its entirety convinces us that this conclusion is supported by the record. Likewise, Estate of Patout v. City of New Iberia, 98-0961 (La.7/7/99), 738 So.2d 544, does not support SWB's position under the facts of this case. In Patout, property owners adjacent to a public landfill were damaged when city employees trespassed on the owners' property to dispose of the city's waste. The court held that in order to qualify as a taking for public purposes, the damage need not be intentionally inflicted, but may be merely a necessary result of the public undertaking. The court noted that the damage to the owners in Patout was not a necessary result of the public undertaking, because it was not necessary for the employees to trespass on the owners' property. Had the landfill been operated properly, there would have been no trespass and, hence, no damage. The trial court's conclusion in the instant case that the contractors performed their work in accordance with the Project documents is supported by the evidence and distinguishes this case from Patout. Similarly distinguishable from the case at bar are Summerville v. Missouri Pacific R.R. Co., 509 So.2d 639 (La.App. 3 Cir.1987) (damages were not the necessary consequence of public work that could have been accomplished without causing flooding to neighboring property owners); MCI Telecommunications Corp. v. Metric Constructors, Inc., 1989 WL 59926 (E.D.La. May 26, 1989) (severance of telecommunications lines by a state contractor laying cable could have been avoided by the exercise of reasonable care); Perkins v. Simon, 265 So.2d 804 (La.App. 3d Cir.1972) (city worker broke a fire hydrant causing the plaintiff's property to be flooded). The foregoing cases are distinguishable from the instant case, in that the plaintiffs herein do not rely on a claim of negligence. It is their position, accepted by the trier of fact, that the Project was performed in accordance with its plans and specifications, and the damage to the plaintiffs was caused as a necessary, albeit regrettable, consequence of the nature of the public work. Pile driving and dewatering, together with the concomitant use of heavy equipment, while serving a valid public purpose, had as their necessary consequence damage to neighboring property. SWB cites Marie v. Police Jury of the Parish of Terrebonne, 161 So.2d 407 (La. App. 1st Cir.1964) in support of its position. However, in that case, the court found no allegation of condemnation in the plaintiff's petition: Summed up, the two articles [in the petition] charge the police jury of the Parish of Terrebonne, acting through contractors or agents, employees and/or servants, had dredged the canal known as the Houma Deep Water Channel in such a manner that the water bottom 65 allegedly leased from the State Wild Life and Fisheries Commission by the plaintiff for the cultivation of oysters had been rendered useless because of the silt deposit and alteration of the natural tidal currents which affected the salinity of the water. Nowhere in the petition does the plaintiff charge an appropriation of the property so as to bring it within the exception to the principle that the sovereign cannot be sued without its consent. Plaintiff's suit is nothing more nor less than as found by the District Court and not one of a deliberate taking and unnecessary damaging of property for public use and benefit. Counsel also misunderstands the basis of the case of Cousin v. Hornsby, supra, [87 So.2d 157 (La.App. 1st Cir.1956)] decided by this Court. The legal basis for recovery in this case as shown in the opinion in 87 So.2d on page 162, 163, is as follows: "In our opinion this record shows no damages as a result of any act committed by the defendant and his subcontractor. Everything done was done in accordance with the contract except the act of going on the property prior to the actual expropriation thereof. No damages were committed outside the terms of the contract by this act. In other words, the plaintiff, with knowledge that the contractor was going upon his land to complete the drainage system in accordance with his contract with the Police Jury, did not choose to legally prevent such action and he is therefore relegated to only an action for the value of his land taken and damages to his adjacent property. This is exactly what he could have gotten and what the Police Jury would have had to pay him had he forced an expropriation suit, and it is exactly what he can get according to the authorities, once the improvement is placed on his property. We are not concerned with the question of removal for his suit is only one for damages. He would have had to yield the property had an expropriation suit been filed. See St. Julien v. Morgan's La. & T.R. Co., 35 La.Ann. 924; Gumbel v. New Orleans Terminal Co., 186 La. 882, 173 So. 518; Tate v. Town of Ville Platte, La.App., 44 So.2d 360 and Koerber v. City of New Orleans, La.App., 76 So.2d 466. "In other words the Police Jury had the right to expropriate this property, the plaintiff had the right to resist, however, he waived this right and under the law the plaintiff can now only get that which he could have gotten had he forced an expropriation proceedings, viz., the value of the land taken and damages incidental to the taking; the nature of such damages is well fixed in expropriation suits * ". Far from representing any modern trend toward the abolishment of the "artificial" shield of immunity for State agencies, the above decision of this court fully recognizes the constitutional shield of immunity for State agencies and strictly follows the exception to that rule where property is taken "for public purposes" with the right of the owner to recover adequate compensation, and even though the owner took no prior action to prevent the placing of the improvements upon his property, he is nevertheless entitled to sue for the same damages he could have gotten had an expropriation suit been filed. Such is the law as set forth in the jurisprudence cited in the quote from the case, supra. Miller v. Colonial Pipeline Co., 173 So.2d 840 (La.App. 3d Cir.1965), cited by 66 SWB, is particularly relevant. In that case, a pipeline company cut irrigation levees and negligently allowed plaintiff's cows to escape through a fence. The court made the distinction, applicable in the instant case, that the negligent damage to the cows did not constitute a taking, but the intentional cutting of the irrigation levees for a public purpose did. We find that the record adequately supports the trial court's finding that the plaintiffs' claim has met the Chambers three-prong test: (1) plaintiffs' interest in their homes and personal property clearly is a recognized species of property right, and the reports of damage estimator A.C.M.S., Inc. as to the scope of work necessary to make the required repairs and the photographs submitted by plaintiffs showing the damage to their property demonstrates that those property rights have been "affected" adversely; (2) the damage was an integral consequence of the pile driving and dewatering work that was a necessary part of the Project; and (3) as to the public purpose in the instant case, it is manifestly evident that providing for improved drainage in an area that has often been referred to as the "bowl" of the city constitutes a valid public purpose.[1] For the foregoing reasons, we conclude that the trial court's ruling that the plaintiffs suffered an inverse condemnation of their property is not manifestly erroneous. SWB contends in the alternative that ACOE is the proper party against whom the plaintiffs should assert their constitutional claim of inverse condemnation. SWB relies on this Court's opinions in Vuljan v. Board of Com'rs of Port of New Orleans, 170 So.2d 910 (La. App. 4th Cir.1965) and Petrovich v. State of Louisiana, 181 So.2d 811 (La.App. 4th Cir.1966) for the proposition that ACOE, and not SWB, is responsible for any "taking" under the circumstances of this case. A careful reading of these cases makes one thing abundantly clear, and that is that the issue of whether a particular entity has taken property within the meaning of the Constitution is to be decided on the facts of the individual case. There simply is no bright line by which it can be determined that an entity did or did not cause an inverse condemnation of property. In Vuljan, the lessee of a water bottom sued the Port Commission alleging damage to his oyster beds caused by the Mississippi River Gulf Outlet. We held that the Commission had no liability for the damage to the oyster beds because the damage was brought about by construction of the Outlet authorized by Congress "over which the United States alone had and has exclusive jurisdiction and control." Vuljan, 170 So.2d at 911-12. This Court held that the test whether an action will lie under the Louisiana eminent domain provision or the Fifth Amendment to the United States Constitution depends entirely upon whether the public project is state or federal, and which government was acting under its power of eminent domain in carrying out the public project. The Court found that the Outlet is a federal project, noting: The federal government alone constructed it after deciding where the project would be built, what spoil disposal areas it would need, their direction and width, and what land, navigation servitudes or easements were required. The State took nothing. Vuljan, 170 So.2d at 912. Louisiana's participation in the Outlet project was limited to its agreement to use 67 its inherent power of eminent domain to save the United States harmless against claims arising out of the Outlet's construction, maintenance and operation. This Court held that this hold harmless places the State "only in the position of agreeing to reimburse the United States the amount which an owner might by judicial determination first recover in damages in an action against the United States." There is no indication that the State of Louisiana had any participation in project design, monitoring, financing or otherwise. The Project Cooperation Agreement between ACOE and SWB, executed by the Mayor of New Orleans in his capacity as President of SWB and certified by the SWB's Special Counsel, provides, inter alia: II. A. 1. The Government shall afford the [SWB] the opportunity to review and comment on the solicitations for all contracts, including relevant plans and specifications, prior to the Government's issuance of such solicitations. The Government shall not issue the solicitation for the first construction contract until the [SWB] has confirmed in writing its willingness to proceed with the Project. To the extent possible, the Government shall afford the [SWB] the opportunity to review and comment on all contract modifications, including change orders, prior to the issuance to the contractor of a Notice to Proceed. In any instance where providing the [SWB] with notification of a contract modification or change order is not possible prior to issuance of the Notice to Proceed, the Government shall provide such notification in writing at the earliest date possible. To the extent possible, the Government also shall afford the [SWB] the opportunity to review and comment on all contract claims prior to resolution thereof. The Government shall consider in good faith the comments of the [SWB], but the contents of solicitations, award of contracts, execution of contract modifications, issuance of change orders, resolution of contract claims, and performance of all work on the Project (whether the work is performed under the contract or by Government personnel), shall be exclusively within the control of the Government. . . . B. The [SWB] may request the Government to accomplish betterments. Such requests shall be in writing and shall describe the betterments requested to be accomplished. If the Government in its sole discretion elects to accomplish the requested benefits or any portion thereof, it shall so notify the [SWB] in a writing that sets forth any applicable terms and conditions, which must be consistent with this agreement. . . . D. The [SWB] shall contribute a minimum of 25 percent, but not to exceed 50 percent, of total project costs in accordance with the provisions of this paragraph. Article III of the Agreement, in parts A, B and C, provides for prior consultation by the Government with SWB to determine lands, easements and rights of way required for the Project, the improvements required on lands, easements and rights of way to enable proper disposal of dredged or excavated materials, and any relocations necessary for the Project. Article V, part A provides for a Project Coordination Team, composed of representatives of the Government and the SWB, which "shall meet regularly until the end of the period of construction. The Government's Project Manager and a counterpart named by the [SWB] shall co-chair the Project Coordination Team." 68 The Project Coordination Team's responsibilities are outlined in Article V, part C of the Agreement: Until the end of the period of construction, the Project Coordination Team shall generally oversee the Project, including issues related to design; plans and specifications; scheduling; real property and relocation requirements; real property acquisition; contract awards and modifications; issues related to the creditable work; contract costs; the Government's cost projections; final inspection of the entire Project or functional portions of the Project; preparation of the proposed OMRR & R Manuals; anticipated requirements and needed capabilities for performance of operation; maintenance; repair, replacement, and rehabilitation of the Project; and other related matters. This oversight shall be consistent with a project management plan developed by the Government after consultation with the [SWB]. Article V, part D provides that the Project Coordination Team may make recommendations to the District Engineer, but that the Government has the discretion to accept, reject or modify the Team's recommendations. Article IX provides that SWB shall hold and save the Government free from all damages arising from the construction, operation, maintenance, repair, replacement, and rehabilitation of the Project, except for damages due to the fault or negligence of the Government or its contractors. The type of continuing input and consultation envisioned in the Agreement effectively distinguishes the facts of this case from those in Vuljan, supra. In the Vuljan opinion, this Court recognized and distinguished two federal cases that found projects to be "state projects", Griggs v. Allegheny County, Pa., 369 U.S. 84, 82 S.Ct. 531, 7 L.Ed.2d 585 (1962) and Danziger v. U.S., 93 F.Supp. 70 (E.D.La. 1950). In both of those cases, as in the case at bar, at the completion of the project, the public improvement would be operated and maintained by the state agency. In the instant case, as in Danziger, title to the servitudes remained in the state agency and were not transferred to the United States. Similarly, the West Jefferson Levee District sought the protection of the Vuljan holding in West Jefferson Levee District v. Coast Quality Construction Corp., 620 So.2d 319 (La.App. 5th Cir.1993), rev'd in part on other grounds, 93-1718 (La.5/23/94), 640 So.2d 1258. In that case, landowners filed reconventional demands in an expropriation suit, originally brought by the Levee District, for compensation, severance damages and delay damages connected to a levee project of the ACOE and Levee District. The Levee District resisted the property owners' claims, contending that the federal court of claims was the proper jurisdiction, having exclusive jurisdiction in cases involving losses caused by federal takings. In that case, the court rejected the notion that because of ACOE's involvement, it was an indispensable party, and the court of claims had sole jurisdiction, finding that the Levee District was, in fact, the "taker" of the property when it filed for expropriation in 1989. SWB also relies on this Court's opinion in the Petrovich case. In that case, as in Vuljan, the damages allegedly suffered "were as a result of the construction of the Barataria Bay Waterway, over which the United States had exclusive jurisdiction and control." This exclusivity of jurisdiction and control is absent in the instant case. 69 For the foregoing reasons, we conclude that the trial court's holding that SWB was the proper party to be held responsible for the taking is not manifestly erroneous. SWB contends that the trial court erroneously imposed liability under La. C.C. art. 667. SWB relies on the Louisiana Supreme Court's holding in Suire v. Lafayette CityParish Consol. Government[2], 04-1459, 04-1460, 04-1466 (La.4/12/05), 907 So.2d 37, wherein the court held that installation of metal sheeting by use of a back-hoe is not "pile driving" within the meaning of La.C.C. art. 667[3], noting: The work the defendants performed in this case is not pile driving as that term is understood in the construction industry. The defendants have demonstrated that the material "driven" in this case, thin metal sheets, and the equipment used, a backhoe, differed from the materials and equipment involved in conventional pile driving. Suire at p. 15, 907 So.2d at 50. The Supreme Court relied on the testimony of the project superintendent, Mike Moore, describing the equipment that would be used in timber pile driving and in sheet pile driving: [In the case of timber pile driving] Oh, you would have a crane with a hundred-foot boom, a big old heavy set of leads, you would have an air hammer, you would have an air compressor half the size of this room to drivedrive the air . . . but we didn't have that on this job. * * [A] sheeting is like a sliver, it justthere's not much vibration because it justit's like it just slivers on the ground, where a pile you've got something two foot round and you're beating it to go in a pile. The ground up-heaves, it's gotyou know, you put a piling in one spot, you've got mud displaced and it's got to go somewhere. But with the sheeting that's why a sheeting is done, is because it's real thin and it just slides in the mud; there's not much vibration. Suire at p. 14, 907 So.2d at 49-50. The Supreme Court noted that the superintendent "maintained throughout his deposition testimony that no pile driving was performed in the Belle Terre Coulee project", and distinguished the potential vibration caused by installing metal sheeting as compared to that caused by conventional pile driving. In the instant case, however, there was evidence that both timber and sheet piling were involved in the Project. Furthermore, while the sheet piles in Suire were merely pushed into the ground with a backhoe, the sheet pile installation in the case at bar was performed by pounding the sheets with a vibratory pile-driving hammer. The Suire court was clearly influenced by the fact that a backhoe is not the type of equipment traditionally associated with pile driving. As Mr. Moore testified in that case, equipment that is traditionally associated with pile driving includes large cranes and vibratory hammers. Such heavy equipment was used on the Napoleon Avenue project, where, according to the testimony of Joel Morrow, James's project supervisor, and the vibration monitoring reports submitted by Citywide Testing & Inspections, Inc., the sheet piles were driven with 70-ton cranes and 70 vibratory hammers. It is this type of equipment, and the potential for damage that it poses, that underlies La.C.C. art. 667's "ultrahazardous" designation for pile driving operations. Citywide's reports indicate that the pounding of sheet piling in connection with the Napoleon Avenue project generated vibrations as great or greater than those associated with the timber pile driving. According to Plaintiff's Exhibit P-585, these highest levels of vibration would have been caused by the crane movement regardless of whether the pile driving involved sheet piles or timber piles. The trial court noted that regardless of whether SWB can be held liable under a theory of absolute liability, it is liable under La.C.C. art. 667 because it knew or should have known that the Project would likely result in damage to neighboring properties, but failed to take adequate steps to prevent that foreseeable damage. In a 1984 study performed by Eustis Engineering for SWB and the City of New Orleans, SWB was advised of the manner in which certain types of construction activity, including dewatering, can cause or affect settlement rates. La.C.C. art. 667 provides that a proprietor can be liable for damage caused by improvement to his property if he knew or should have known that his works would cause damage, that the damage could have been prevented by the exercise of reasonable care, and that he failed to exercise such reasonable care. The trial court found that such was the case as to the homes of each of these plaintiffs. The trial court refers to the 1984 Eustis study and the opinion of this Court in Mossy Motors, Inc. v. Sewerage and Water Bd. of City of New Orleans, 98-0495 (La.App. 4 Cir. 5/12/99), 753 So.2d 269, recognizing the damaging effect of dewatering as support for its finding of actual knowledge on the part of SWB. Furthermore, ACOE wrote to SWB on February 25, 2000 advising that construction activities, including water-table draw-down from dewatering, heavy equipment movement and vibrations from driving and pulling sheet pile could result in damage to adjacent properties. Mr. Sullivan testified that when he received this letter, he had no reason to disagree with ACOE's statements or opinion. Mr. Sullivan testified that SWB monitored the Project to determine the extent of the impact of construction activities on neighboring properties and went so far as to obtain pre-construction photographs to document the level of anticipated damage. The record supports the trial court's finding that despite the anticipation of property damage, SWB proceeded with the Project without changing its construction methodology. It did not exercise its option under the Agreement with ACOE to request betterments because, according to Mr. Sullivan, those "betterments" would have been at SWB's expense. The trial court found, and we find, no evidence in the record to indicate that SWB exercised its right of comment under the Agreement with ACOE to request alteration of the dewatering program to ameliorate damage to neighboring property from water table draw-down. The trial court found that SWB made a conscious decision to proceed with the Project without change, having balanced the cost of correction against the risk of damage to the neighbors. Mr. Sullivan testified that SWB relied on its monitoring program to fulfill its duty to the neighbors; however, when that monitoring revealed that construction activities were causing what the trial court referred to as "profound impact well beyond the limits of construction," SWB did nothing to correct the problem. 71 The trial court found that as early as August 16, 2000, Eustis, in its capacity as Brown's geotechnical engineering firm, advised SWB that the dewatering operations were drawing down water levels far outside the limits of construction, the same condition for which SWB had been held liable in the Mossy case. Thereafter, and continuing throughout the Project's term, SWB received monthly reports of dewatering-caused soil settlement outside the limits of the construction. SWB offered no evidence at trial that it responded to this information either by attempting to arrest the condition or to minimize the effects of the dewatering. The trial court concluded that by electing not to request betterments, for which it would have to pay, SWB gambled on the amount of damage that might be sustained by the plaintiffs. In April, 2001, prior to commencement of the Phase 2 dewatering, SWB had received numerous complaints of property damage caused by its construction activities from Napoleon Avenue residents, including complaints from the Ferans. Their home had split down the middle because of settlement. Nonetheless, SWB did not request any changes in the dewatering program. Mr. Morrow testified that he wrote to ACOE on October 29, 2001 expressing concerns about the possibility that dewatering might be having a damaging impact on adjacent properties outside of the limits of construction. This testimony is evidence that while SWB had been aware of problems for over a year, it had not communicated this information to contractors such as Brown. Furthermore, even after having received complaints from neighbors of actual damage, SWB did nothing to request any changes to the Project, as it had a right to do under the Agreement with ACOE. There is no basis in the record for SWB's contention that the damages of which the plaintiffs complain were caused by third party negligence. The record is devoid of evidence of such third party negligence. There is clear support for the trial court's finding that SWB was aware of the potential for damage from its construction activities, that it monitored those activities with that potential in mind, and did nothing to remediate the damages of which it was made aware well before the commencement of Phase 2 of the dewatering process. For the foregoing reasons, we find that the record supports the trial court's finding of liability on SWB's part under both the absolute liability and negligence provisions of La.C.C. art. 667, and that the trial court's imposition of liability under these theories is not manifestly erroneous. SWB contends that the trial court erroneously admitted and relied on the testimony of Daniel Heyer. Trial courts are required to exercise a gate keeping function, including a careful analysis of the methodology employed by a proffered expert. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993); State v. Foret, 628 So.2d 1116 (La. 1993). SWB introduced standards from two publications of the American Society of Civil Engineers, "Guidelines for Failure Investigation" and "Guidelines for Forensic Engineering Practice." It contends that Mr. Heyer did not follow these standards or consider data concerning vibration and dewatering generated by the Project. SWB's expert, having considered this data and applied several peer-reviewed computational formulae, determined that the Project could not have caused differential settlement in excess of 1/16th of an inch, too little to have caused the plaintiffs' damage. Its forensic engineer, 72 Leonard Quick, determined likewise that construction vibration could not have caused damage. SWB claims that Mr. Heyer did not consider actual vibration records and admitted he did not know how to perform a rate of attenuation curve analysis, a peer-reviewed formula for determining the amount of energy that can be expected at a given distance from the source of vibration. Mr. Quick testified that the lack of a correlation between the progress of construction and actual settlement refuted Mr. Heyer's causation theory. Mr. Quick also performed elevation surveys of the plaintiffs' homes and determined that the elevations showed a tilt away from the excavation site, the opposite of the tilt that Mr. Quick testified would be expected if the tilt had been caused by the excavation. SWB contends that the plaintiffs' evidence consists of "isolated data" and fails to correlate this data with the overall settlement in the Broadmoor area during this time. In its reasons for judgment, the trial court noted acceptance of Mr. Heyer as an expert in the field of forensic engineering. The court accepted his testimony that dewatering in connection with the Project was a substantial contributing cause of damage to all three homes. Additionally, he testified that pile driving in connection with the Project was a substantial contributing cause of the damage to the Feran and Galan homes. The trial judge found, and we agree, that the evidence of record supports Mr. Heyer's opinions. The trial court reviewed Mr. Heyer's methodology in its reasons for judgment: Heyer testified that when conducting an investigation into whether construction activities have caused damage, experts in his field commonly begin by comparing homes at varying distances from the construction activities to determine whether homes closer to the construction have experienced unusual damage when compared with those farther away from the actual work. Heyer performed such an investigation in this case. In homes fronting on (like the Ferans' and Dr. Galan's homes) and in those closer to the Napoleon Avenue project (like the Holzenthals' home), Heyer observed the types of damage an engineer expects to see in connection with the type of construction activities involved. Heyer testified that the degree of such observed damage decreased with distance from the construction project (i.e. the farther you travel from the mid-line of the Napoleon Avenue neutral ground, the less damage you see, even in homes of the same age and construction). This observation led Heyer to conclude that the drainage construction project likely caused the damage to the plaintiffs' homes. During the Daubert hearing, Mr. Heyer testified that forensic engineers employ engineering principles and observation of damage to determine whether damages to a structure are causally related to a given event. The methodologies used by forensic engineers, according to Mr. Heyer, include careful observation of damage to the subject and surrounding structures, in order to determine whether the damage is consistent with the suspect phenomenon. While SWB expert Mr. Quick opined that reliable forensic engineering opinion could not be rendered without conducting a more costly analysis of various empirical data, he admitted that he, himself, routinely relied on the methodologies employed by Mr. Heyer in reaching conclusions as to causation issues. Indeed, Mr. Quick rendered a causation opinion concerning Dr. Galan's home without having considered this type of data. 73 Prior to becoming SWB's expert, Mr. Quick, acting for an insurer, rendered a causation opinion with respect to Dr. Galan's home based solely on his inspection, and without having reviewed any of the material that he testified at the Daubert hearing were necessary. Neither did Mr. Quick review the materials upon which Mr. Heyer relied in forming his opinion. Nonetheless, his report is stamped with the professional engineering seal, indicating that he used reliable, accepted, professional forensic engineering methodology in issuing the report. According to Mr. Quick's report, his analysis of the effect of vibration at Dr. Galan's home was based upon "site inspection and photographic documentation of the reported and observed damage, and analysis of the forensic physical evidence and damage profiles performed on October 31, 2001, and other documents, but not vibration monitoring data for the Project". Mr. Quick admitted that it was not necessary to review vibration monitoring data to reach an engineering conclusion as to whether there was vibration damage to the home. It appears that the data SWB believes Mr. Heyer should have reviewed prior to having given his deposition, such as the project specifications and Project monitoring data, were unavailable to Mr. Heyer pursuant to an in limine ruling of the trial court. Mr. Heyer testified that after his deposition was taken, he reviewed all of the material viewed by Mr. Quick. Had that review undermined his opinions as to causation, he would have been responsible, as a professional forensic engineer, to offer a different opinion at the trial. At the conclusion of the Daubert hearing, the trial court found that Mr. Heyer's methodologies were reasonable. In oral reasons, the court noted: The Court finds it interesting that notwithstanding the specific elements deemed necessary by Mr. Quick, that he testified that this protocol could and would be tailored to the specific request made by the party requesting the report. It is my opinion that if the methodology to be applied can be and is varied by the defendant's expert, then there is no rigid standard toward which the defendant can hold Mr. Heyer. Additionally, Mr. Heyer has testified that although the items outlined by Mr. Quick would have been helpful to him in compiling his report, they in no way prevented him from employing his 30 years' [sic] of experience as a civil engineer and physical findings at the inspection. The Court finds that Mr. Heyer's methodologies were reasonable. Mr. Quick also testified that he has used his experience in the same manner when called upon to render reports. Finally, the Court finds that the methodology he employed in this case does meet the Daubert standard, and the defendant's Motion in Limine is denied. In support of its position, SWB cites Millican v. River Road Const., Inc., 05-485 (La.App. 5 Cir. 2/3/06), 924 So.2d 255. In that case, the court reviewed a trial court's summary judgment. The issue did not relate to the qualification or methodology used by an expert, but rather to the fact that, in that case, in the face of empirical data offered by the defense, the plaintiff's expert did not offer an opinion that the defendant's activities actually caused the plaintiff's damage. In the absence of such causation evidence, the Fifth Circuit affirmed the trial court's summary judgment in favor of the defendants. The trial court is vested with wide discretion in determining who should or should not be allowed to testify as an expert and its rulings should not be reversed 74 in the absence of clear error. Mistich v. Volkswagen of Germany, Inc., 95-0939, p. 8 (La.1/29/96), 666 So.2d 1073, 1079. This discretion is even greater in a bench trial. See Johnson v. Melton, 03-1132, pp. 5-7 (La.App. 4 Cir. 2/4/04), 867 So.2d 804, 808-809, citing Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 151, 119 S.Ct. 1167, 1175, 143 L.Ed.2d 238 (1999). Our review of the transcript of the Daubert hearing convinces us that the trial court's decision to accept Mr. Heyer's expert opinion as to causation is within its wide discretion. SWB contends that the trial court erroneously awarded damages in the absence of evidence linking specific items of damage to the Project. All plaintiffs claim damage to their homes as a result of the dewatering, timber and sheet pile driving, and use of heavy equipment. The Ferans and Dr. Galan likewise claim damage to items of personal property, furniture and artwork which the trial court found was caused by dust intrusion from the construction activities and vibration. All plaintiffs claim to have suffered emotional distress from watching and experiencing the physical damage to their homes and from the manner in which SWB handled their claims. The Louisiana Supreme Court noted in Chambers, supra, 595 So.2d at 602: There can be little doubt that one aim of Article I, § 4, of our state constitution in requiring that the owner shall be compensated for property "taken or damaged . . . to the full extent of his loss" was to assure that the state and its subdivisions compensate owners for any taking or damaging of their rights with respect to things as well as for any taking or damaging of the objects of those rights. . . . The history of Section 4 reveals a desire to increase the level and scope of compensation beyond that provided by pre-existing state law. . . . (the purpose of the additional language in Article I, § 4 was to compensate an owner for any loss sustained by reason of the taking, and not merely restricted as under the former constitution to the market value of the property taken and to reduction in the market value of the remainder.) Initially, we note that the trial court's conclusion concerning causation rests upon the court's decision to accept the testimony of the plaintiffs' expert, Mr. Heyer, and to reject that offered by the SWB expert, Mr. Quick. As to the latter, the trial court held: Quick's testimony lacks credibility, and this Court should not rely on his opinions in forming the Court's Judgment. Quick admitted under cross examination that he ignored the conclusions regarding water table draw-down reached by geotechnical engineers retained in connection with the project, opting instead to conduct his own analysis, even thought he is not a geotechnical engineer. [FN 44: "Tellingly, the Board's counsel did not ask Boutwell, the geotechnical engineer the Board called to testify about vibration-induced settlement, to testify on issues of dewatering, even though Boutwell testified that he was qualified to render geotechnical opinions on this issue."] Additionally, Quick ignored monitoring data that contradicted and disproved his theoretical analysis with respect to vibration impacts. He testified that his opinions were based largely upon survey data, which in many instances contradicted the opinions he rendered. [FN 46: "For instance, Quick testified that a survey station near So. Claiborne Avenue, far from the construction activities, showed settlement roughly equivalent to that experienced at the plaintiffs' homes 75 when construction activities were nearest those homes. However, when viewed over the entire time span that dewatering was occurring in the vicinity of the plaintiffs' homes (May 2000 to November 2001), survey data for the So. Claiborne Avenue area station reveals that area experienced less than half of the settlement experienced at the survey points nearest the plaintiffs' homes. Moreover, Quick conveniently omitted the fact that in the two-month period after dewatering began in front of the Galan home (July 2001 to September 2001), the survey point in front of the Galan home experienced more than 7 inches of settlement, while the greatest settlement experienced at any of the eight settlement points at the So. Claiborne Avenue end of the project was only half an inch. See Exhibit P-1097, table 1.] Finally, Quick testified that he was not aware of, and did not consider, the fact that the accuracy of this survey data had been called into question, even though records of the engineering firm (that he claims he reviewed) did just that." We find no error in the trial court's decision to accept Mr. Heyer's expert testimony and to reject that of Mr. Quick. Rosell v. ESCO, 549 So.2d 840, 844-845 (La.1989). The trial court conducted an extensive analysis of the causation evidence adduced at trial. The court noted that, in addition to Mr. Heyer's testimony concerning causation, there was independent evidence proving that the Project caused the plaintiffs' damages. Analysis of the dewatering monitoring data and business records of Eustis Engineering confirm Mr. Heyer's opinions. Analysis of ground-water monitoring undertaken at SWB's request confirms that within a month of the commencement of Phase 1 dewatering, monitoring wells as far as two blocks away from the dewatering activities experienced construction-induced draw-down of 1.5 to 3.5 feet. A May 8, 2002 letter from Eustis's geotechnical engineer Thomas Stremlau confirmed that Eustis referred to actual draw-down capable of causing settlement. During Phase 1, Eustis advised SWB that most of the monitoring wells along Napoleon Avenue had experienced construction-induced draw-down. The court noted that although Mr. Quick related these low well readings to lack of rainfall or lower river states, his finding was incorrect, as it was contradicted by Eustis and by the fact that dramatic drops in pressure were observed contemporaneously with initiation of dewatering at times when both rainfall and river stages were elevated. The court noted that monitoring outside of the excavation site continued to reveal depressed water levels, and maximum draw-down levels were experienced at the wells closest to the Holzenthal and Feran homes, where draw-down reached five and a half feet. Even more than a year after the construction activities had passed by the plaintiffs' homes, the December 2002 monitoring report shows that wells nearest the plaintiffs' homes continued to show draw-down of between two and four feet below pre-construction levels. Mr. Heyer testified that the homes would continue to experience settlement damage as long as the water levels remained depressed. The trial court concluded, based on the monitoring data, that dewatering lowered the water levels under all three homes at issue to a sufficient degree to cause the settlement damage Mr. Heyer observed. The Feran home is located between two wells, P-0-D and P-4-D, that showed significant draw-down as a result of construction activities nearly a year prior to the 76 first photograph showing new settlement damage down the middle of the Feran home. Monitoring well P-1-D, the nearest well to the Galan home, showed significant construction-induced draw-down when the construction was still two blocks from the home. Although there was no monitoring well near the Holzenthal home, observations at wells P-1-D and P-4-D, taken when construction was one and a half to two and a half blocks away confirms that dewatering caused significant draw-down at the Holzenthal home, which is only a block away from dewatering activities at the Y intersection. We find the evidence supports the trial court's conclusion that all three homes experienced draw-down as a result of the Project's dewatering of a sufficient degree to cause the significant settlement damage observed and documented by Mr. Heyer. Likewise, the record supports the trial court's conclusions with respect to vibration damage to the plaintiffs' homes. Both Mr. Heyer and Gordon Boutwell, SWB's expert, testified that vibrations from pile driving can cause soil consolidation in the saturated stratum III sand layer, which consolidation could result in settlement damage. The experts diverged in their assessment of the relevant vibration intensities. Mr. Heyer opined that vibration levels as low as 0.10 ppv[4] could cause damage. The monitoring reports showed levels in excess of that level at the Feran and Galan homes. Mr. Boutwell testified that the vibration intensities at those homes was insufficient to cause significant damage. This opinion, however, was based on data provided to Mr. Boutwell by Mr. Quick, which the trial court rejected. Apparently, Mr. Quick ignored multiple actual records of vibration levels in excess of those generated by his theoretical model, characterizing the records as "unreliable." Mr. Boutwell testified that authoritative engineering studies confirmed that construction-induced vibration could cause damage to older structures at levels as low as 0.12 or between 0.1 ppv and 0.5 ppv. A monitor at the Galan home's foundation recorded vibration of 0.59 inches per second when piles were being driven seventy-five feet away. The Feran home showed a reading of 2.0 ppv and other readings in the area between 0.25 ppv and 1.35 ppv. Mr. Quick had eliminated these readings from the material he gave to Mr. Boutwell and on which Mr. Boutwell based his opinion.[5] SWB contends that certain elements of damage were not proved to a legal certainty, and that the plaintiffs did not show affirmatively that the damages were directly attributable to the defendant's activities, citing American Cas. Company v. Aetna Cas. and Sur. Company, 162 So.2d 811, 812 (La.App. 4th Cir.1964). Of course, as findings of fact, the trial court's decision to include various observed damage to the homes within the ambit of SWB's responsibility will not be disturbed in the absence of manifest error. See, Rosell v. ESCO, supra. As noted hereinabove, our Constitution requires that a person whose property is taken or damaged for a public purpose is entitled to be compensated fully for his loss. Similarly, La.C.C. art. 667 provides for compensation to the extent of the cost to restore damaged property. SWB contends that Richard Hood, the plaintiffs' damage adjuster, "merely 77 tallied up a total for every item of damage that he observed in these homes, regardless of the cost, and whether it was related to the Project or not." It claims that Mr. Hood's estimates are excessive and not based on a causal link between damage and the Project. Not only did the trial judge observe and listen to the plaintiffs[6], their adjuster, and SWB's estimator, Mr. Winston Wood, but she also visited the three homes in question. The plaintiffs testified to their personal reasons for intending to repair their homes, and the trial court found that the plaintiffs' truthfulness and credibility were not challenged. The trier of fact found that the plaintiffs met their burden of showing that they are entitled to the full cost of repairs to their homes, without respect to the homes' market values. Plaintiffs' damage expert, Richard Hood, of A.C.M.S., Inc. was accepted by the Court as an expert in property damage loss appraisal and estimating costs of repair. The court found reasonable his estimates of $379,805.36 to repair the Holzenthal home; $330,983.14 to repair the Galan home; and $246,936.10 to repair the Feran home. The trial court also noted that the Ferans have incurred out-of-pocket repair costs in the amount of $2,345 for temporary bracing to the roof structure to prevent its collapse. The evidence of W.D. Scott, a local mold investigation and remediation expert, testified without contradiction as to his inspection of the homes. While the Feran home was fortunately free of mold, he found mold at the Galan and Holzenthal homes. The estimates of moving expenses were provides by Donald Hug of United Van Lines, Paulk's Moving and Storage, Inc. These estimates were $15,825 for the Holzenthal movables; $12,500 for the Galan movables and $18,650 for the Feran movables. SWB alleges that these expenses are not necessary, but does not question the amounts testified to by Mr. Hug. Mr. Wood admitted that moving expenses can be an element of repair costs, but opined that the plaintiffs' furnishings can be moved from room to room as the repair work is done, and that these elderly plaintiffs should be required to remain in their homes during the repair process. Since the estimates reflect tearing out and replacing walls and ceilings, painting and shoring the homes, it is clearly unreasonable to require the plaintiffs to place their belongings at risk of further damage and to remain in the dust and fume-ridden homes during these repairs. The trial court properly rejected Mr. Wood's opinion in this respect. The record supports the trial court's finding that the homes suffered severe damage as a result of the Project. The plaintiffs testified candidly that, like most homes of similar construction and vintage in New Orleans, their walls had some hairline cracks prior to the Project; however, they testified that these small cracks had been tolerable, manageable and capable of repair during routine painting. Once the Project began, many new, more severe cracks developed and the older, smaller cracks worsened to an intolerable degree. The Feran home suffered severe structural damage, in effect cracking from the roof to the ground. Dr. Galan's porch collapsed. All three houses will require significant repairs, including shoring and leveling. It seems unreasonable and could result in greater cost to require repairs to be made on any given wall only to the new cracks, leaving any old hairline cracks that 78 may not have been exacerbated by the Project. Indeed, the trial court rejected SWB's argument that a crack-by-crack assessment should be made, finding such an analysis to be "neither feasible nor reasonably calculated to compensate the plaintiffs for their loss." The trial court held: First, some of the damage consists of pre-existing cracks that were substantially aggravated by the project. It is impossible for this Court, looking at pre-construction and post-construction photos taken in differing lights, under differing conditions, with different cameras, to determine the degree of exacerbation of those cracks and make any sort of reasonable assessment as to which ones require repair as a result of construction. [FN83: "Furthermore, it is unclear from Calvin Folse [SWB's photographer]'s testimony whether certain construction activities, particularly the placement of heavy equipment, took place prior to the taking of the pre-construction photographs. Conveniently, the Board never offered any evidence to clarify this confusion.] Second, and more importantly, in order to repair the damage caused by the project, practically all of the walls and ceilings of the plaintiffs' homes have to be repaired, regardless of whether certain cracks in those walls pre-existed the construction damage. To repair the settlement damage to these three homes, the homes will first have to be shored and leveled. This shoring process, necessitated by the Board's construction activities, will more likely than not cause new cracks. So walls that are not already cracked from the construction project will likely become cracked from the shoring work, which is needed to correct the settlement problems caused by the project's dewatering and vibration. . . . Since shoring is a necessary element of the repairs to these homes, and since shoring will necessitate repairs not currently evident, an estimation of damage solely on the basis of currently existing cracks will not adequately compensate the plaintiffs." The trial court correctly rejected Mr. Wood's estimates, as they were based on the same crack-by-crack analysis the court found to be inappropriate where pre-construction photographs were either unavailable in the case of the Holzenthal home or unreliable as in the case of the Feran and Galan homes, and where shoring and leveling would more likely than not result in additional cracking of the walls and ceilings. Furthermore, Mr. Wood, at Mr. Quick's direction, did not include estimates for those elements of damage that Mr. Quick believed were not caused by the Project. As to those elements, Mr. Hood's evidence is uncontroverted. The worst examples of settlement induced damage were not present in the pre-construction photos that SWB had taken of the Feran and Galan homes[7]. These photographs confirm that the major damage necessitating the extensive repairs to the homes did not exist prior to the Project. The trial court found that the SWB photographs taken before the actual dewatering at the location of the Feran and Galan homes were not reliable. The court noted that the photographs were taken after some heavy equipment had been moved into the neighborhood and after nearby monitoring wells began to reflect draw-down. Furthermore, some of the same cracks photographed pre-construction by SWB's agent actually appear to be worse than the same cracks post construction, an 79 anomaly that the trial court felt could have been the result of the pre-construction photographs' having been taken by specialists in the documentation of such damage for the purpose of high-lighting the damage. The trial court accepted Mr. Hood's testimony that the severe crack down the middle of the Feran home and the partial collapse of Dr. Galan's porch, neither of which appear in pre-construction photographs, would have necessitated the same cost of repairs even had other items of damage pre-existed the project. SWB seeks to limit the repairs to those items observed by Mr. Heyer in his report. However, the trial court noted that she was aware from Mr. Heyer's testimony that he was not retained, and did not undertake, to analyze or identify every single item of damage caused by the Project. Mr. Heyer's report addressed the condition of the plaintiffs' homes and the scope of the Project to determine whether the Project caused damage to the homes. His analysis was undertaken in order to determine generally whether the homes had suffered settlement damage as a result of the Project. He obtained a sufficient but not exhaustive number of samples and concluded that the damage had, in fact, occurred. At no time did Mr. Heyer suggest that his report was a definitive tabulation of all construction-induced damage to the property. SWB also claims that the awards are excessive because they exceed the appraised values of the homes. This ignores the fact that the appraisals were "as is" appraisals made after the construction damage had been inflicted on the homes. As such, the appraisals are not relevant. Furthermore, because of the personal attachment that the homeowners have to their long-term residences, they are entitled to the full repair, since that cost, while perhaps disproportionate to the underlying value of the homes, is not exorbitant. See Roman Catholic Archdiocese of New Orleans v. Louisiana Gas Service Co., 618 So.2d 874, 879-880 (La. 1993). SWB contends that this Court should reverse the trial court's awards for emotional distress as excessive and for damage to personal property for lack of evidence. We find nothing in the record to indicate that the awards of $15,000 to Mr. and to Mrs. Holzenthal, of $25,000 to Dr. Galan and of $25,000 each to Mr. and Mrs. Feran are beyond the "great, even vast" discretion of a trier of fact in fixing such damage awards. Youn v. Maritime Overseas Corp., 623 So.2d 1257, 1261 (La.1993). See also Williams v. City of Baton Rouge, 98-1981, 98-2024 (La.4/13/99), 731 So.2d 240, noting in 1999 an award range of up to $35,000 for mental anguish damages associated with property damage, and Ard v. Samedan Oil Corp., 483 So.2d 925 (La. 1986). In Louisiana, an award for mental anguish resulting from property damage is permissible in limited situations: (1) when property is damaged by an intentional or illegal act; (2) when property is damaged by acts for which the tortfeasor will be strictly or absolutely liable; (3) when property is damaged by acts constituting a continuing nuisance; or (4) when property is damaged when the owner is either present or nearby and suffered a psychic trauma as a direct result. Blache v. Jones, 521 So.2d 530, 531 (La.App. 4th Cir.1988). Clearly, the instant case qualifies under subsections (1), (2) and (3). The trial court observed the testimony of the plaintiffs and found that the plaintiffs were credible witnesses. They were elderly and had resided in their homes for many years, and felt helpless as they endured months of 80 watching their homes sustain increasing damage. Dr. Galan and the Ferans also lost personal property. The court found that they will also suffer future distress when they undergo the always stressful renovation process. Applying the Youn standard of review, we find that the trial court's awards of $15,000 each to Mr. and Mrs. Holzenthal, and of $25,000 each to Mr. and Mrs. Feran and to Dr. Galan, must be affirmed. SWB contends that the trial court erred in awarding damages for timber pile shoring based on hearsay evidence. The trial court awarded the Holzenthals $105,900, Dr. Galan $139,000 and the Ferans $107,300 for timber pile shoring, although the homes were not shored on timber piles prior to having been damaged by the Project. At trial, SWB objected that timber pile shoring would constitute a "betterment" to which the plaintiffs were not entitled. This Court rejected a similar argument in the Mossy Motors case. Mr. Allan Shepherd of Davie Shoring Company testified that current building codes exceed the requirements in place when the homes originally were constructed. Clearly, the plaintiffs are entitled to the full cost of repair to current standards, even if such construction would be an improvement over the original condition of the building. Mossy Motors, Inc., supra at pp. 15-16, 753 So.2d at 278-79. In this appeal, SWB now argues that the evidence establishing the cost of timber pile shoring was inadmissible hearsay. The shoring estimates were prepared by Frank Harris, a former employee of Davie Shoring.[8] In the absence of Mr. Harris, Davie Shoring's estimator, Mr. Shepherd, visited the homes, and verified the information in the Harris report with measurements and verified the elevations of the homes to determine if the scope of the piling location was the same. Mr. Shepherd testified that were he asked to estimate foundation work at these homes today, he would employ the same methodology. We find no error in the trial court's ruling allowing Mr. Shepherd to testify in lieu of the unavailable witness and finding no prejudice to SWB. The trial court gave oral reasons for judgment and findings of fact on April 25, 2005 with respect to the third-party defendants' Motions to Dismiss. The motions were considered ad seriatim. SWB contends that the trial court erroneously dismissed James in the face of a prima facie case that James violated Project specification and acted improperly, causing the plaintiffs' damages. As to James, the trial court found that, unlike some of the other third party defendants, James had no contractual relationship with SWB. Its contract was with ACOE only. There is no testimonial or other evidence to show that James did not perform its duties in accordance with the plans and specifications outlined in its contract with ACOE. While SWB has argued that at some points during the construction, vibration monitoring records indicated that James exceeded allowable vibration limits, there is no evidence as to when the limits were exceeded or that James was notified or failed to take necessary action to remedy the situation. As a matter of law, a contractor on a state or federal project who complies with the project's plans and specifications is not liable for damages to the property of 81 third parties. Yearsley v. W.A. Ross Construction Co., 309 U.S. 18, 60 S.Ct. 413, 84 L.Ed. 554 (1940); La.R.S. 9:2771. In order to avoid involuntary dismissal of its third party demand against James, SWB had the burden of establishing a prima facie case by a preponderance of the evidence. La.C.Civ.Pro. art. 1672 B. SWB did not produce evidence proving that it was more probable than not that James's alleged violations of ACOE's plans and specifications for the Project caused the plaintiffs' damages. On appeal, SWB claims that the design of temporary retaining structures could have prevented water table drawdown outside the construction limits. However, this claim was not asserted at trial, ACOE approved James's design for the structure and SWB has not shown that the design violated any specification. Both Mr. Sullivan and Mr. Becker testified that they had no evidence that James did not comply with its contract with ACOE. Neither was there testimony or other evidence that James's specifications and plans with regard to the system to prevent de-watering were not in compliance with the ACOE contract. SWB seems to make a res ipsa loquitor argument on appeal, that is, "if the Project was performed in accordance with the plans and specifications, damage to surrounding property owners would not have occurred". SWB relies on the testimony, transcribed at pages 190 and 198 of Volume 22, and at pages 13, 21 and 23 of the record, of its General Superintendent, Mr. Sullivan. His testimony at page 190 of Volume 22 does not relate to this issue. At page 198, Mr. Sullivan testified, "And to be frank with you, I worked on a lot of construction projects, and I never anticipated damage if everything was done properly." That statement does not indicate that had the Project been performed in accordance with the plans and specifications, no damage could have occurred. At page 13 of Volume 23, Mr. Sullivan was asked whether heavy equipment or movement within the construction right-of-way presented a potential for damage to neighboring structures. He replied, "I would not contribute [sic] that damage to near structures if they were working within the limits of the contract." Mr. Sullivan gave no basis for this opinion. At page 21 of Volume 23, Mr. Sullivan did not address the issue of deviation from the plans and specifications. At page 23 of Volume 23, Mr. Sullivan testified that he asked Brown to undertake monitoring for the Project, and that the purpose of the monitoring was to control damage from drawdown. There is no testimony that Brown failed to execute its monitoring responsibility. Both Mr. Sullivan and Joseph Becker, SWB's Project engineer, acknowledged that they knew of no failure by James to comply with the ACOE plans and specifications. Mr. Quick also testified that the ACOE accepted James's work as having been performed in compliance with plans and specifications. SWB called no one from ACOE to support its claim of James's deviation from the contract. SWB asserts that the vibration monitoring reports show that James violated the ACOE specifications. However, the ACOE specification on pile driving anticipated that the acceptable vibration level would be exceeded, and that damages caused by this anticipated excess vibration, as distinguished from negligently caused excess vibration, would be considered to be part of the Project's cost. There is no evidence that the excess vibrations caused by the pile driving were caused by James's negligence. The ACOE specifications with 82 respect to pile driving stated that when the limit was exceeded, as anticipated, the ACOE would notify James, who then would take measures to reduce the vibrations. There is no proof in the record that ACOE gave such a notice to James or that James failed to take necessary steps in response to such notice. SWB contends that the "spikes" of vibration over the level set in the contract as the threshold for notice by the monitor to James constitutes a violation by James of the plans and specifications. This argument ignores the uncontroverted evidence of record that such "spikes" are unavoidable in the course of this type of construction. Furthermore, there is no evidence that James failed to act upon any warning from the monitor that vibration levels were approaching or exceeding the notification threshold. For the foregoing reasons, we find that the trial court's judgment dismissing SWB's claim against James is not manifestly erroneous. SWB contends that the trial court erroneously dismissed S & P in the face of a prima facie case that it acted improperly by failing to include in the contract bid specifications the requirement that construction not impact ground water outside the easement and by failing properly to discharge its monitoring duties. As to S & P, the trial court found that it designed the box culvert and its duties included monitoring the daily construction activities, pursuant to its contract with SWB. The court held that S & P's contract was for professional services. Thus, it was incumbent upon SWB to establish a standard of care, S & P's breach of the standard, and that the breach caused the plaintiffs' damages. The court noted that neither of SWB's expert engineers established through their testimony the standard of care applicable to S & P or that S & P breached an applicable standard of care. The trial court rejected SWB's contention that S & P's action in stamping the Project plans gave rise to liability. The trial judge accepted the testimony demonstrating that the stamp is indicative only of the preparation of the design and specification by S & P. With regard to the TRS system, the trial court accepted the uncontroverted testimony that ACOE designed the system and that this ACOE design was incorporated verbatim into the final design and specifications for the project. The trial court rejected SWB's argument that S & P's letter of May 4, 1998 advising Brown of its concerns with regard to withdrawal of sheet pilings constitutes proof that S & P knew of problems, but failed to report them to SWB. The testimony of Mr. Sullivan, the SWB superintendent, revealed that the chain of command required S & P to report directly to Brown, and that the contract between SWB and S & P did not require S & P to report directly to SWB. The trial court noted that there is no testimony to establish that the concern expressed by S & P in the aforementioned correspondence caused damage to the plaintiffs. While SWB argues that S & P violated the terms of its contract with SWB, we note from the record that SWB did not offer testimonial or other evidence that such a violation caused any damage to the plaintiffs. The specifications governing the temporary retaining structure and the dewatering plan were prepared by ACOE, and not by S & P. Therefore, ACOE, and not S & P, is responsible to SWB for the adequacy of those specifications. S & P neither applied its professional seal to the specifications nor certified the adequacy of 83 ACOE's specifications. Because the ACOE specifications controlled, S & P cannot be held to have breached its contract with SWB. Likewise, S & P had no authority to and was expressly prohibited from altering ACOE's specifications. Furthermore, S & P did not have geotechnical responsibility for the design and evaluation of the sheet pile removal and its potential effect on neighboring property. It merely incorporated information provided by ACOE into the Project drawings. In order to prevail against S & P, SWB had the burden of proving that S & P's professional engineering services were not performed with the same degree of skill and care exercised by others in the same profession in the same general area. Greenhouse v. C.F. Kenner Associates Ltd. Partnership, 98-0496, p. 7 (La.App. 4 Cir. 11/10/98), 723 So.2d 1004, 1008. SWB had the further burden of proving that S & P's alleged breach of this standard of care was the legal cause of the plaintiffs' damages. The plaintiffs made no claim against S & P. Their expert engineer, Mr. Heyer, offered no testimony that S & P's professional services deviated from the standard applicable to engineers in the New Orleans area. SWB's engineering expert, Mr. Quick, was not asked and did not offer evidence of such deviation. In the absence of such evidence, the trial court properly dismissed SWB's claims against S & P. SWB contends that the trial court erroneously dismissed Brown in the face of a prima facie case that it failed to discharge its obligation to prevent damage from construction vibration, dewatering and settlement. As to Brown and Continental Casualty, the trial court noted in its oral reasons for judgment and findings of fact that SWB had a professional services contract with Brown, like that with S & P, that was testified to by Mr. Sullivan and introduced as a joint exhibit. The trial court specifically rejected SWB's claim that Brown's services also included activities that do not fall under the category of professional services. As testified to by Mr. Joseph Becker, SWB's Project Engineer, Brown acted as an extension of SWB's engineering department, and all of the testimony and evidence demonstrated that Brown acted solely within the professional services contract. Because this is a professional service contract, SWB cannot recover unless it establishes the professional standard of care, proves that Brown breached that standard, and that the breach caused the plaintiffs' damages. The trial court found that SWB presented no evidence of a standard of care, much less that Brown breached an applicable standard. We find no error in the trial court's conclusion. Furthermore, there is no evidence that Brown initiated, directed, engaged in or performed any construction activities. Absent such evidence, the trier of fact could not draw a direct relationship or causal connection between the plaintiffs' damages and Brown's actions. Likewise, SWB's reliance on alleged inadequacies in the monitoring of vibration levels is inapplicable to Brown. Plaintiffs alleged, and the evidence proved, that it was the construction work and not the monitoring, that damaged their property. As Mr. Sullivan testified, the purpose of the monitoring program was to determine whether damage alleged to be caused by the Project was in fact caused by the Project. There is no evidence that the monitoring program was or should have been designed to eliminate the likelihood of damage to adjacent property. With or without monitoring, the 84 plaintiffs would have sustained the damage caused by the construction process. SWB contends that the trial court erroneously found that Fidelity did not owe SWB a duty to provide a defense, and erroneously dismissed Fidelity, ignoring the separation of insureds clause in the Fidelity contract that provided a separate policy of insurance for SWB. As to Fidelity, the trial court noted that Fidelity issued a general liability insurance policy to its insured, Brown, a copy of which was submitted jointly by the parties. The policy specifically excludes coverage for damages caused by rendition of professional services. Since Brown's sole relationship with the parties in this case was for provision of professional services, the policy exclusion applies to SWB's claim against Fidelity. In order to determine whether an insurer owes a duty to defend a party, the court's analysis must be based upon the factual allegations contained within the four corners of the plaintiff's petition and the terms contained within the four corners of the insurance policy. The Fidelity policy provides in pertinent part: WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule [the SWB] as an insured but only with respect to liability arising out of your [Brown's] operations or premises owned by or rendered to you [Brown]. An insurer must provide a defense to an insured if, assuming all of the allegations of the petition to be true, there would be both coverage under the policy and liability to the plaintiff. American Home Assur. Company v. Czarniecki, 255 La. 251, 230 So.2d 253 (La.1969). Fidelity's policy provides that SWB would be an additional insured, but only with respect to liability arising out of Brown's operations. The plaintiffs' petitions are devoid of any allegations sufficient to inform Fidelity of the possibility that SWB could incur any liability to the plaintiffs arising out of Brown's operations. There is no allegation that SWB's liability to the plaintiffs comes through Brown, and no allegation that Brown was in any way negligent or failed to comply with its contractual obligations or the plans and specifications for the Project as they related to Brown. Absent such allegations, Fidelity has no obligation to defend SWB. None of the plaintiffs alleged any damages arising out of Brown's operations or premises owned by or rendered to Brown. Therefore, there can be no coverage for SWB as an additional insured under the policy. SWB relies on Orleans Parish School Board v. Scheyd, Inc., 95-2653 (La.App. 4 Cir. 4/24/96), 673 So.2d 274 and Suire v. Lafayette City-Parish Consolidated Government, supra. In both of those cases, however, plaintiffs alleged bases for liability and named as defendants the named insureds. Those allegations of named insured liability triggered the duty to defend and are absent in the case at bar. SWB argues that Fidelity's position would obviate any scenario under which coverage could be afforded to SWB as an additional insured. We note that the policy would provide coverage if, as in the jurisprudence cited by SWB in support of its position, a Brown employee injured on the job sued SWB for personal injury damages. In such a case, the damages would arise under Brown's operation, and coverage would likely be found. Furthermore, the Fidelity policy, as a general liability policy, does not provide coverage for professional malpractice, the very claim on which SWB bases its third party demand against Brown. 85 SWB characterizes some unspecified portion of Brown's work as non-professional liaison services. In that connection, it cites the Alabama Supreme court's opinion in United States Fidelity & Guaranty Company v. Armstrong, 479 So.2d 1164 (Ala.1985). The Alabama court found that administrative services did not come within the professional services exclusion and found coverage. SWB suggests that Brown has characterized itself as a liaison between SWB and unspecified "other parties", and claims the benefit of the Alabama decision. In the case at bar, SWB did not established that Brown performed non-professional "liaison" services, or failed in their performance. While Ann Springston, Brown's engineer, noted that some sub-consultants Brown hired performed such services as public relations advice, and that Brown had administrative employees, she clearly testified that these non-professional employees did not perform Brown's responsibilities under the SWB contract. SWB has not directed us to and our independent review of the record reveals no evidence that its liability to the plaintiffs was related to any of the work performed by Brown's non-professional employees. For the foregoing reasons, we find no error in the trial court's disposition of SWB's claims against Brown and Fidelity. This is clearly a case in which a valid and vital public purpose, improved drainage of our city-below-sea-level, was served. The evidence clearly preponderates that the contractors on the Project performed in accordance with the plans and specifications provided by ACOE and SWB. Despite the best efforts of the SWB and ACOE and the contractors, dewatering and vibration damage to these neighboring interests was the natural consequence of the Project. Under the Avenal/Chambers analysis, this is a classic case of inverse condemnation and liability for foreseeable damage caused by ultrahazardous activities. As such, the case is appropriate for the trial court's dispositive judgment. Finding no manifest error in the trial court's judgments, we affirm the judgments in these consolidated appeals. AFFIRMED. TOBIAS, J., concurs in the result and assigns reasons. TOBIAS, J., concurs in the result and assigns reasons. I respectfully concur in the result. As stated by the Louisiana Supreme Court in Avenal v. State, 03-3521 (La.10/19/04), 886 So.2d 1085: We find it unnecessary to conduct the full [State Through Dept. of Transp. and Development v.] Chambers analysis, which seeks to determine whether a plaintiff is entitled to eminent domain compensation because his private property has been taken or damaged for public use. In this case, the relevant consideration is whether plaintiffs' property was "taken" for a public purpose, or whether it was "damaged" for a public purpose. A distinction between a taking and a damaging is necessary because of the existence of two relevant prescription statutes, La. R.S. 13:5111 and La. R.S. 9:5624. Section 5111 of Title 13 is entitled "Appropriation of property by state, parish, municipality or agencies thereof; attorney, engineering and appraisal fees; prescription" and provides in pertinent part: "[A] proceeding brought against the state of Louisiana . . . or other political subdivision . . ., for compensation for the taking of property by the defendant, other than through an expropriation proceeding, . . . shall prescribe three years from the date of such taking." Section 5624 of Title 9 provides: 86 "When private property is damaged for public purposes any and all actions for such damages are prescribed by the prescription of two years, which shall begin to run after the completion and acceptance of the public works." Thus, although the Louisiana Constitution provides that just compensation shall be paid when property is taken or damaged, La. R.S. 13:5111 provides a three-year prescriptive period for takings and La. R.S. 9:5624 provides a two-year prescriptive period for damage. A.K. Roy, Inc. v. Board of Commissioners for Pontchartrain Levee District, 237 La. 541, 547-48, 111 So.2d 765, 767 (1959) (Prescriptive period of La. R.S. 9:5624 applies only when private property is damaged for public purposes, but not actions for recovery of private property taken for public purposes). The distinction between a taking and a damage claim was made in a case in which a holder of a predial lease invoked property rights pursuant to the 1921 Constitution. Columbia Gulf Transmission Co. v. Hoyt, 252 La. 921, 215 So.2d 114 (1968). In that case, the Court found the lessee's rights under a predial lease fell under the constitutional designation of "private property" in Art. I, § 2 of the 1921 Constitution and required just compensation to the lessee before the lease rights were damaged, even though Louisiana codal law classified a lessee's rights as personal rights. However, as particularly relevant to this case, the Court distinguished the terms "taken" and "damaged" in Art. I, § 2. The Court stated that "property is `taken' when the public authority acquires the right of ownership or one of its recognized dismemberments." 215 So.2d at 120. "Property is considered `damaged' when the action of the public authority results in the diminution of the value of the property." Id. 03-3521 at pp. 27-29, 886 So.2d at 1104-05.[1] From the foregoing, it appears that the majority's analysis of the case at bar as one in inverse condemnation (appropriation) is incorrect; the case is one of damages subject to the provisions of La. R.S. 9:5624. The distinction between the two concepts is, in my view, immaterial in this case because the result is the same, to-wit, the plaintiffs suffered damages as a result of a public work. With respect to the issue of damages, I cannot say that the majority erred in its awards. However, I reiterate my opinion, expressed in Grefer v. Alpha Technical, 02-1237, pp. 3-5 (La.App. 4 Cir. 3/31/05), 901 So.2d 1117, 1155-56 (Tobias, J., concurring on rehearing),[2]writ denied, 05-1590 87 This Page Contains Footnotes. *88 (La.3/31/06), 925 So.2d 1248,[3] that there exists a tension between the Supreme Court cases of Roman Catholic Church of Archdiocese of New Orleans v. Louisiana Gas Service Co., 618 So.2d 874 (La.1993) and Corbello v. Iowa Production, 02-0826 (La.2/25/03), 850 So.2d 686, which ought to be resolved by the Supreme Court. The case at bar presents a vehicle through which the Supreme Court might clarify the matter. NOTES [1] SWB apparently has abandoned its claim that plaintiffs must establish liability under La.C.C. art. 667 as a prerequisite to an action for inverse condemnation. [2] This argument applies only to the Holzenthal plaintiffs, since both the Feran and Galan claims involve timber pile driving. [3] SWB apparently has abandoned the argument it made in the trial court that it is not a "proprietor" within the meaning of La.C.C. art. 667. [4] Peak Particle velocity (ppv) is a measure of vibration. [5] It appears that SWB has abandoned its argument that the damages to the plaintiffs' homes were caused by drought. [6] Mr. Feran was unable to testify at trial because of illness. The Court accepted his deposition testimony, which was read into the record. [7] SWB did not have the Holzenthal home photographed pre-construction. [8] The trial court found that SWB had not taken Mr. Harris's deposition while he was a Davie employee and was not prejudiced by the substitution of Mr. Shepherd's testimony for that of the unavailable Mr. Harris. [1] For further amplification and discussion of the issue, see Avenal v. State, Dept. of Natural Resources, 01-0843, pp. 42-59 (La.App. 4 Cir. 10/15/03), 858 So.2d 697, 732-741 (Tobias, J., dissenting), rev'd. 03-3521 (La.10/19/04), 886 So.2d 1085. [2] In pertinent part, my concurrence stated: In our original opinion, we discussed at some length the cases of Roman Catholic Church of Archdiocese of New Orleans v. Louisiana Gas Service Co., 618 So.2d 874 (La.1993) and Corbello v. Iowa Production, 02-0826 (La.2/25/03), 850 So.2d 686. However, we did not fully discuss the tension between them, which, in my view, makes the jury's determination of compensatory damages neither manifestly erroneous nor clearly wrong. In a supplemental application for rehearing, Exxon cites this court to Hornsby v. Bayou Jack Logging, 04-1297 (La.5/6/05), 902 So.2d 361 . . ., a case decided by the Supreme Court while Exxon's application for rehearing in this case was pending before this court. Corbello is a contract case decided by the Louisiana Supreme Court after the appeal in the case at bar was docketed in this court. Roman Catholic Church is not a pure tort case. Underlying the recovery in Roman Catholic Church is the Church's contractual obligation to the U.S. Department of Housing and Urban Development ("HUD") that required the Church to operate the property for low-income individuals for a fixed period of time, in default of which ownership of the property would revert to HUD. Thus, I find that it is reasonable to read the two cases in pari materia. Whereas, the Grefers' claims against ITCO sound in both contract and tort, their claims against Exxon are in tort. In Roman Catholic Church, at the time of suit the Church had already expended a very substantial sum to restore the property. In context, that was reasonable. In Corbello, the plaintiff had not expended anything, yet was allowed to recover $33 million without any obligation to spend anything to restore the damaged thing. As I read Corbello, where the restoration (remediation) is contractual the restoration costs may include apparently speculative costs without an obligation to expend the money to restore, but where the remediation costs are tort based, only actual sums expended can be considered. If the Supreme Court in Corbello read out of the contract at issue therein the word "reasonably," how can we find an award of $56 million by the jury is unreasonable? We found that the Grefers had "both personal and economic reasons for wanting to restore their property to its original condition." We reached this conclusion, relying upon Judge Grefer's statements that (a) "he and his siblings want to restore the property, which has been in the Grefer family since 1875, to its original condition and not to the mere minimum DEQ standard"; (b) he and his siblings were "unable to sell or lease the contaminated property without exposing themselves to liability and they do not want to burden their children with this"; and (c) he expressed "grave concern about the effects the radioactive contamination might have on the neighbors and the general public." A trier of fact has the right to weigh that testimony and give it such weight as deemed appropriate. One might assert that Judge Grefer was framing his answers to questions propounded to come within the ambit of Roman Catholic Church's personal-to-the-owner test, ignoring the language in the case referring to the "homestead", i.e., one's personal dwelling (which is not the case of the Grefers). But again, this falls to the trier of fact to weigh and evaluate. In my view, the Supreme Court's standards for recovery must be understood in the context of the whole body of the law respecting recovery of damages. Among these are the doctrine of waste and the reasonable person. How can we conclude in light of the damage award in Corbello ($33 million to remediate a property having a value of $108,000) that the $56 million award is unreasonable? One might argue that the Grefers will remediate the property down to levels that make it commercially viable and usable, i.e., levels within the guidelines of the Louisiana DEQ and/or levels that will satisfy a financial institution that it can safely lend money on the property without the exposure of having to remediate the property at substantial cost should the property come into the financial institution's ownership by virtue of foreclosure. But is that difference in dollars not a justified award? The plaintiffs will likely expend substantial sums in defense of third party claims and responding to any awards of damages. Hornsby is distinguishable on its facts. The case addresses damages for the improper cutting of trees, where a special statute specified what damages were recoverable and the penalties associated therewith. In my view, a material difference exists between cutting of trees and contamination from radioactivity. A landowner can sell his property without trees on it, and the value of the land may be reduced because of the absence of the trees. However, land contaminated with radioactivity at a level which makes the land unmarketable or undevelopable because no financing entity will loan money thereon as discussed above, is something that is certainly very personal to the owner when the contamination is caused by a third person. Thus, Judge Grefer's testimony to the effect that he and his family are unable to sell or lease the contaminated property without exposing themselves to liability is something that comes within the ambit of something personal to the owner. Superimpose on this that, unlike Roman Catholic Church where the Church had the financial resources to repair the damage, the Grefers are apparently without the financial resources to remediate their property without first recovering the funds to do so. Is not the jury's determination in this case reasonably within their discretion? [3] As of the date of the issuance of this opinion, the Grefer case is pending before the United States Supreme Court on application for a writ of certiorari. Exxon Mobil Corp. v. Grefer, no. 05A981, stay denied, ___ U.S. ___, 126 S.Ct. 2056, 164 L.Ed.2d 777.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1977374/	177 B.R. 437 (1994) In re Leslie L. MOORE, Charlene A. Moore, Debtors. Bankruptcy No. 94-61403. United States Bankruptcy Court, N.D. New York. December 20, 1994. 438 439 Randy Schaal, Trustee, Sherrill, NY. Richard Croak, Albany, NY, for trustee. James Selbach, Syracuse, NY, for debtor. MEMORANDUM-DECISION, FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER STEPHEN D. GERLING, Chief Judge. The within contested matter is before the Court by way of a motion filed by Trustee Randy J. Schaal ("Trustee") objecting to Leslie and Charlene Moore's ("Debtors") claimed exemption for a certain annuity contract ("annuity"). The Trustee's motion, filed pursuant to Federal Rule of Bankruptcy Procedure 4003(b), asserts that the annuity was purchased with the intent to hinder, delay, or defraud creditors and therefore the claimed exemption is avoidable pursuant to New York Insurance Law ("NYIL") § 3212(e)(1) and Bankruptcy Code § 548(a)(1) (11 U.S.C. §§ 101-1330) ("Code").[1] At a motion term held in Utica, New York on July 26, 1994, the Court heard oral argument on the within motion. The Court then scheduled an evidentiary hearing for September 26, 1994, and following the conclusion of the evidentiary hearing on that date the matter was submitted for decision. JURISDICTIONAL STATEMENT The Court has core jurisdiction over the parties and the subject matter of this contested matter pursuant to 28 U.S.C. §§ 1334(b), 157(a), (b)(1), (b)(2)(B), and (b)(2)(H). FACTS Prior to filing their Chapter 7 petition, Debtors owned, among other assets, two life insurance policies and certain shares of stock. On or about March 9, 1994, Debtors first sought advice from bankruptcy counsel, James Selbach, Esq., ("Counsel"). See Trustee's Exhibit "3" Form 1, p. 1. Debtors testified that Counsel advised them to cash in their life insurance policy ("policy") and all of their stock and use the proceeds to purchase an annuity. Debtors allege that on or about March 23, 1994, they utilized the cash surrender value of their policy and the sale proceeds of the stock to purchase an annuity worth $16,771.67. The cash surrender value of Debtors' policies, which they had owned for 13 years, was approximately $12,000. The proceeds from the stock totaled approximately $4,000.[2] Debtors testified that they were unable to pay their debts as they became due and on May 18, 1994, Debtors filed a voluntary joint petition for relief under Chapter 7 of the Code. The annuity was properly listed in Schedule "B" and Schedule "C" of Debtors' petition. Schedule "C" lists the annuity as an exempt asset pursuant to NYIL § 3212. The transfer of assets to purchase the annuity was also disclosed in Question 10 of Debtors' Statement of Financial Affairs filed with their Chapter 7 petition and at the initial meeting of creditors. Debtors' petition lists a total of $51,205 in exempt assets and $0 in nonexempt assets. 440 Debtor Leslie Moore testified that he is 60 years old and suffers from memory loss, dizziness, and weakness of the limbs. Debtor Leslie Moore alleges that he has been seeing a physician for ten years and that his symptoms may be caused by multiple sclerosis. ARGUMENTS Debtors assert that their conversion of assets from non-exempt to exempt status merely amounts to permissible pre-bankruptcy planning. Debtors claim that the conversion of non-exempt property to an exempt form is allowable and that extrinsic evidence of fraud must be established by the Trustee for the exemption to be avoided. Debtors argue that permitting pre-bankruptcy planning is consistent with the fresh start policy of the Code. The Trustee contends that Debtors' last minute purchase of an annuity policy with non-exempt assets was done with the intent to hinder, delay or defraud creditors. The Trustee agrees with Debtors that extrinsic evidence of fraud must be present to avoid the exemption. The Trustee argues that several badges of fraud are present and, as such, Debtors' claimed exemption should be denied pursuant to NYIL § 3212(e)(1) and Code § 548(a)(1). DISCUSSION The Code permits the debtor to choose either the exemptions specified in Code § 522(d) or the exemptions available under state and other federal law, unless state law "specifically does not . . . authorize" the debtor to select the Code exemptions. See Code § 522(b). Under New York law, debtors are prohibited from selecting the Code § 522(d) exemptions. See New York Debtors & Creditor Law ("NYD & CL") § 284. Therefore, a New York debtor may only utilize the exemptions available under New York law or under federal law other than the Code. See In re Maidman, 141 B.R. 571, 572 (Bankr.S.D.N.Y.1992). Pursuant to NYD & CL § 282, a debtor has three sources of exemptions: (i) the personal and real property exempt under New York Civil Practice Law and Rules ("CPLR") §§ 5205 and 5206, (ii) insurance policies and annuity contracts and the proceeds thereof exempt under NYIL § 3212, and (iii) certain property and the rights to receive certain benefits and property specified in NYD & CL § 282(1), (2), and (3). However, NYD & CL § 283 limits or qualifies the exemptions granted under NYD & CL § 282. See In re de Kleinman, 172 B.R. 764, 771 (Bankr.S.D.N.Y.1994). Debtors, as well as the Trustee, direct the Court's attention to NYIL § 3212 to determine the extent, if any, of Debtors' annuity exemption. The Court, however, begins its discussion with an analysis of NYD & CL § 283(1). NYD & CL § 283(1) contains a $5,000 limit on exemptions that New York debtors in bankruptcy may claim for certain annuities and personal properties under C.P.L.R. § 5205(a). Annuity contracts subject to the $5,000 limitation are those that are: (a) initially purchased by the debtor within six months of the debtor's filing a petition in bankruptcy, (b) not described in any paragraph of section eight hundred five (d) of the Internal Revenue Code of nineteen hundred fifty-four[3], and (c) not purchased by application of proceeds under settlement options of annuity contracts purchased more than six months before the debtor's filing a petition in bankruptcy or under settlement options of life insurance policies. NYD & CL § 283(1) (emphasis added). Debtors purchased their annuity on or about March 23, 1994, and filed their bankruptcy petition on May 18, 1994. See Trustee's Exhibit "3". Debtors' annuity, however, was partially purchased with proceeds arising under settlement options of a life insurance policy. Thus, the first issue before the Court is whether Debtors' annuity may exceed the $5,000 exemption limitation because 441 a portion of the annuity was purchased with proceeds arising under settlement options of a life insurance policy. In an attempt to provide debtors a fresh start, but not instant affluence, New York imposes modest limitations on the exemptions that debtors can claim in and out of bankruptcy. See In re Bartoszewski, 36 B.R. 424, 425 (Bankr.N.D.N.Y.1984). Following the legislative signposts, courts also interpret statutory exemptions in a manner necessary to effectuate the policy of a fresh start, not a head start. See In re Hill, 95 B.R. 293, 297 (Bankr.N.D.N.Y.1988). As with all New York exemption provisions, NYD & CL § 283(1) balances the debtor's and the creditor's interests. This exemption provision allows debtors to purchase annuities on the eve of bankruptcy in order to preserve up to $5,000 for their fresh start. The language of the exemption statute demonstrates the legislature's intent to balance the debtor's right to a fresh start and limit the debtor's ability to deliberately "load up" on exempt property. It is incumbent on courts not to extend the application of the exemption statute beyond its plain intent. See Northern New York Co. v. Bano, 151 Misc. 684, 687, 273 N.Y.S. 694, 698 (N.Y.Co.Ct.1934). Therefore, the Court cannot interpret NYD & CL § 283(1) as allowing annuities, purchased on the eve of bankruptcy, to provide a safe harbor for all non-exempt assets where only a portion of the annuity was purchased with proceeds arising under settlement options of previous insurance policies or annuities. The Court finds that in the matter sub judice, the $5,000 exemption limitation is applicable, at least in part, to Debtors' annuity. However, in keeping with the policy recognized by this Court that exemption provisions are to be construed liberally, see In re Hill, supra, 95 B.R. at 297, the Court finds that the annuity is fully exempt to the extent it was purchased with funds rolled over from the settlement options of Debtors' life insurance policy. Such an interpretation finds support from the fact that had Debtors not liquidated their life insurance policy to purchase an annuity, the life insurance would have been exempt pursuant to NYD & CL § 282 and CPLR § 5205(c)(2), (3). The $5,000 exemption limitation of NYD & CL § 283(1) only applies to the portion of the annuity purchased with non-exempt assets. Thus, the portion of the annuity purchased with the funds representing the cash surrender value of Debtors' insurance policy, approximately $12,000, is exempt and the remaining portion of Debtors' annuity is subject to the $5,000 limitation. NYD & CL § 283(1) states that "The aggregate amount that the debtor may exempt from property of the estate for . . . benefits, rights, privileges, and options of annuity contracts described in the following sentence shall not exceed five thousand dollars." At the evidentiary hearing, the Trustee argued that the $5,000 exemption limitation of NYD & CL § 283(1) only applies to the distribution from an annuity. Thus, arguably, the principal of the annuity is completely exempt and distributions from the annuity are exempt to the extent of $5,000. The Court cannot agree with such an interpretation. NYD & CL § 283(1) places a $5,000 cap on the "benefits, rights, privileges, and options of annuity contracts." The broad language of this section was intended to place an exemption limit on the principal of the annuity contract, not just distributions from the annuity. If the intent had been to leave the principal of the annuity completely exempt and place a $5,000 exemption limit on just the payments from the annuity, then the New York legislature would have used specific language as they did in other exemption provisions. For example, CPLR 5205(d)(1) specifically exempts the entire trust principal and places a 90% exemption limit on the income from the trust. The Court will not judicially legislate a head start for debtors and upset the delicate balance contemplated by the legislature. See In re Hill, supra, 95 B.R. at 297. Therefore, the Court interprets NYD & CL § 283(1) as applying a $5,000 exemption limit on the entire annuity and not just payments therefrom. The $5,000 limitation applies to the aggregate of debtor's exemption under 442 CPLR 5205(a) and certain annuity contracts. The Court's task of determining whether Debtors' claimed exemption is within the $5,000 limitation is hampered by the parties' failure to provide the Court with an exact amount as to the portion of the annuity funded by nonexempt assets, i.e. Debtors' stock. Therefore, the Court directs that up to $3,800 from the portion of the annuity funded by stock proceeds may be exempted.[4] The Trustee argues that Debtors' purchase of the annuity with non-exempt assets was done with actual intent to hinder, delay or defraud creditors.[5] The Trustee concludes that the pre-petition transfer of non-exempt assets into the annuity should be avoided. The Second Circuit has held that a transfer prior to bankruptcy of non-exempt assets does not ipso facto compel the conclusion that there was an actual intent to hinder, delay or defraud creditors. In re Adlman, 541 F.2d 999, 1002 (2d Cir.1976). In fact, the fresh start policy of the Code encourages a debtor to make full use of the exemptions to which a debtor is entitled. In re Barker, 168 B.R. 773, 775 (Bankr.M.D.Fla. 1994) (citing In re Decker, 105 B.R. 79, 83 (Bankr.M.D.Fl.1989)). There must be extrinsic evidence of an actual intent to hinder, delay, or defraud creditors, aside from the mere transfer, for the court to find the transfer to be fraudulent. In re Adlman, supra, 541 F.2d at 1003. The Trustee, as objector to the claimed exemption, bears the burden of proof. Federal Rules of Bankruptcy Procedure 4003(c); In re Woodford, 73 B.R. 675, 679 (Bankr.N.D.N.Y.1987) (citations omitted). Therefore, the Court must determine whether the Trustee has presented sufficient indicia or "badges" of fraud to conclude that Debtors' actions were performed with intent to hinder, delay, or defraud creditors. Among the factors which courts have examined to determine if fraud is present are the following: (1) whether there was fair consideration paid; (2) whether the debtor was rendered insolvent as a result of the transfer or whether the debtor was insolvent at the time of the transfer; (3) the amount of the transfer; (4) whether there is a genuine purpose for the transfer aside from avoiding creditors; (5) the length of time between the transfer and the filing of bankruptcy; (6) the amount of nonexempt property which the debtor had after the transfer; (7) the debtor's failure to provide available evidence and to testify with significant preciseness as to the pertinent details of his activities shortly before filing the bankruptcy petition. See In re Beckman, 104 B.R. 866, 870 (Bankr. S.D.Ohio 1989); In re Mueller, 867 F.2d 568 (10th Cir.1989). The Court notes that of the foregoing factors, 2, 5 and 6 are present in the matter sub judice. Debtors converted all of their remaining non-exempt property two months before their bankruptcy petition was filed. Debtors' testimony supports a finding that they were insolvent, on at least an equity test basis, when they purchased their annuity. However, these three factors do not, standing alone, establish extrinsic evidence of fraud. In re Beckman, supra, 104 B.R. at 870; see also In re Johnson, 8 B.R. 650, 653-654 (Bankr.D.S.D.1981). The Court does not find that Debtors' actions rise to the level of fraud. Debtors' pre-bankruptcy planning was not accompanied by concealment or conduct calculated to mislead creditors. Debtors clearly revealed their actions in their bankruptcy petition as well as at the first meeting of creditors. Further, Debtor Leslie Moore's age and medical condition support a finding that the 443 conversion of non-exempt assets was prudent pre-bankruptcy planning and not done with the intent to defraud creditors. Based on the totality of facts and circumstances presented in this case, the Court concludes that the Trustee has not demonstrated the existence of fraudulent intent on Debtors' part. Accordingly, the purchase of the annuity contract is not subject to avoidance pursuant to NYIL § 3212(e)(1) or Code § 548(a)(1). For the reasons set forth herein, it is ORDERED that the claimed exemption of Debtors' annuity is allowed under NYD & CL § 283(1) to the extent said annuity was purchased with the proceeds from Debtors' life insurance policy; it is further ORDERED that Debtors may claim as exempt, under NYD & CL § 283(1), not more than $3,800 from the portion of the annuity purchased with proceeds arising from the sale of Debtors' stock; and it is further ORDERED that the Trustee's objection, pursuant to NYIL § 3212(e)(1) and Code § 548(a)(1), to Debtors' claimed exemption in their annuity is denied to the extent set forth above; and it is further ORDERED that in the event the Trustee and Debtors cannot agree upon the portion of the annuity policy purchased with the proceeds of Debtors' life insurance policy as well as the portion purchased with the proceeds of Debtors' stock within 30 days of the date of entry of this Memorandum-Decision and Order, then the Court will, upon request of either party, restore this contested matter to its calendar for an appropriate determination. NOTES [1] The Trustee proposed to assert a Code § 548 cause of action in an adversary proceeding. However, the Debtors explicitly waived any objection to its inclusion in the within contested matter. [2] The parties did not provide an exact breakdown of what portion of the funds used to purchase the annuity were from Debtors' insurance proceeds and what portion were from the sale of stock. [3] The Court does not consider this requirement because Internal Revenue Code § 805(d) is no longer in effect. [4] Debtors exempt $1,200 under CPLR 5205(a)(5). See Trustee's Exhibit "3", Schedule "C". The $5,000 aggregate exemption limitation less $1,200 leaves Debtors with $3,800 that they may exempt under NYD & CL § 283(1). The allowance of such an exemption, of course, is subject to the Court's determination of whether Debtors acted with fraudulent intent. See infra at p. ___-___. [5] The Trustee's fraudulent transfer claim is based on NYIL § 3212(e)(1) and Code § 548(a)(1). Due to the similarity between the Insurance Law provision and Code § 548(a)(1), the Court's analysis addresses the two statutory provisions together.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1851227/	685 So. 2d 450 (1996) Ronald ATWOOD, Plaintiff-Appellant-Appellee, v. David Warren HYLAN, et ux, Defendants-Appellees-Appellants. No. 28971-CA. Court of Appeal of Louisiana, Second Circuit. December 11, 1996. 451 A. Richard Snell, for Plaintiff-Appellant-Appellee. Kitchens, Benton, Kitchens & Warren by Paul E. Kitchens, Minden, for Defendants-Appellees-Appellants. Before WILLIAMS, STEWART and GASKINS, JJ. WILLIAMS, Judge. The plaintiff, Ronald Atwood, and the defendants, David W. Hylan, Sr. and Edwina B. Hylan, appeal a trial court judgment ordering plaintiff to remove a portion of his boathouse and pier and denying defendants' claims for damages. For the following reasons, we affirm in part, reverse in part and remand. FACTS In 1966, the Louisiana Legislature created the Claiborne Parish Watershed District ("District"). The state purchased and transferred its interests in land to the District, which was authorized to acquire other servitudes and rights of way in order to create and maintain Lake Claiborne. In 1974, Rev. David Hylan purchased a lakefront lot from his mother. An adjacent plot of land on the lake was owned by W.T. Taylor, who built a pier and boathouse, which extended into the water at an angle and crossed an "imaginary" line projecting from the land boundary 452 between the two properties. In June 1987, Ronald Atwood purchased Taylor's property. According to Hylan, he asked Atwood later that year not to extend the pier. In 1991, Atwood sold the property and later reacquired it in March 1993. Atwood rebuilt and expanded the boathouse on the original pilings, so that it crossed four and one-half feet over the extended property line. The structure and boat stalls were roughly in the same position, and at the same angle from shore, as the original. However, Atwood further extended the pier eight feet past the projected boundary line. In June 1992, the Hylans purchased from the original subdivider a 100 square foot tract of lakebed land adjacent to and aligned with the existing property boundaries. Portions of Atwood's boathouse and pier were attached to this land. In September 1992, Hylan obtained a building permit from the Claiborne Parish Watershed Commission for Lake Claiborne ("Commission") and wrote to Atwood requesting that he terminate his construction. Hylan then complained about Atwood's structure at an October 1992 meeting of the Commission, which did not take any official action. Hylan wrote a letter to the local newspaper complaining that Atwood's structure partially blocked his view of the lake. He also contacted several state and parish agencies and the district attorney's office, but was told that they could not prevent Atwood from renovating an existing structure. In November 1992, the Hylans built a pier upon their tract of lakebed land twelve feet from the property line. The pier extended 60 feet from the shore, parallel to the property line, but at one point is approximately four feet from Atwood's structure due to the angle of the boathouse. This close distance prevented boats above a certain size from docking in the stalls from that side. Atwood then filed a petition against David Hylan and his wife, Edwina, seeking injunctive relief, damages and recognition of a predial servitude, including a right of passage over the waters in front of the Hylans' property for the purpose of gaining access to his boat stalls. The district court denied Atwood's request for injunctive relief. The Hylans subsequently filed an answer and reconventional demand seeking to be declared owners of all portions of Atwood's structure encroaching on their land. Hylan contended that Atwood's structure was an encroachment which had to be removed. Atwood sought removal of the Hylans' pier. After the close of evidence, the trial judge took the matter under advisement and the parties submitted post-trial briefs. The trial court rendered judgment in favor of the Hylans and ordered Atwood to remove that portion of his pier located west of a perpendicular line drawn by the court, on property owned by the Hylans. The trial judge denied the Hylans' claims for damages. Atwood filed a motion for new trial requesting that the judgment be amended to reflect the judge's written opinion requiring Atwood to remove only that portion of his pier lying west of the perpendicular line drawn by the court and not the property line described in the judgment. The trial judge granted the motion and amended the judgment accordingly. Atwood and the Hylans appeal. DISCUSSION LSA-C.C. Art. 670 Predial Servitude Atwood argues the trial court erred in ordering the removal of a section of his encroaching boathouse and pier rather than imposing a servitude on the Hylan estate. The Hylans contend the trial court erred in failing to require Atwood to completely remove that portion of his structure located on their property. LSA-C.C. Art. 670 provides: When a landowner constructs in good faith a building that encroaches on an adjacent estate and the owner of that estate does not complain within a reasonable time after he knew or should have known of the encroachment, or in any event complains only after the construction is substantially completed the court may allow the building to remain. The owner of the building acquires a predial servitude on the land occupied by the building upon payment of compensation for the value of the servitude taken and for any other damage that the neighbor has suffered. 453 In the absence of manifest error, we will not disturb the trial court's determination of good faith by a landowner. Winingder v. Balmer, 93-0874 (La.App. 4th Cir. 2/11/94), 632 So. 2d 408. Atwood testified that he had rebuilt an existing boathouse and pier that had been used by the prior owner and was not aware that his structure crossed over the Hylans' extended property line. After listening to the testimony of the witnesses, the trial court concluded that Atwood's encroachment was in good faith. This finding is not clearly wrong. In addition, the evidence shows that the encroachment by the Atwood structure predates the Hylans' acquisition of the lake bottom land. David Hylan testified that he purchased the property with knowledge of the encroaching structure. Hylan first specifically requested that Atwood terminate his construction in a September 1992 letter, at a point when the boathouse and pier were substantially complete. Thus, the facts contained in the record support the need to establish a servitude. A predial servitude is a charge on the servient estate for the benefit of a dominant estate. The two estates must belong to different owners. LSA-C.C. Art. 646. In its written reasons for judgment, the trial court did not discuss Atwood's demand for recognition of a predial servitude upon the Hylan estate, but impliedly rejected this remedy by ordering that Atwood remove a portion of his encroaching structure. The language of Article 670 gives the trial court discretionary authority to grant a predial servitude once the required elements are satisfied, with payment of compensation to the adjoining landowner whose property is burdened by the servitude. Thompson v. Hemphill, 438 So. 2d 1124 (La.App. 2d Cir.1983). As stated previously, the record supports the conclusion that Atwood's encroachment was in good faith and that the Hylans failed to complain until the structure was substantially complete. Under these circumstances, we conclude that the trial court's refusal to grant a predial servitude constitutes an abuse of discretion. Antis v. Miller, 524 So. 2d 71 (La.App. 3rd Cir.), writ denied, 531 So. 2d 271 (La.1988). Therefore, we amend the judgment to grant Atwood a predial servitude on the land occupied by his encroaching boathouse and pier. In addition, this servitude shall include an area of four feet extending around the perimeter of the entire Atwood structure to allow access for repair and maintenance. The Hylans remain in possession of this property and are its owners, subject to the servitudes in favor of Atwood and the state. Atwood will acquire a predial servitude upon payment of compensation for its value to the Hylans. Based on this record, we are unable to determine the value of the servitude. Consequently, we remand this matter to the trial court for an evidentiary hearing for the purpose of awarding the Hylans a reasonable amount of compensation. Liability under LSA-C.C. Art. 667 & 668 Atwood contends the trial court erred in allowing the Hylans to maintain a pier in a location that interferes with the use of his property. LSA-C.C. Art. 667 provides that although an owner may do with his estate whatever he pleases, he cannot make any work thereon which may deprive his neighbor of the liberty of enjoying his own estate, or which may cause him damage. Although one is not at liberty to perform work by which his neighbor's buildings may be damaged, every owner is free to do on his own ground whatsoever he pleases, although it should occasion some inconvenience to his neighbor. LSA-C.C. Art. 668. In support of his contention, Atwood cites Winingder v. Balmer, 93-0874 (La.App. 4th Cir. 2/11/94), 632 So. 2d 408, in which a landowner built a fence on his property that came within several inches of the Winingder home. The court found that the fence caused physical damage to their home and deprived the Winingders of the enjoyment of their property. The present situation can be distinguished in that the Hylans' pier did not cause any damage to Atwood's structure and does not prevent access for maintenance of the boathouse. The trial judge found that the Hylan pier does not infringe any other lot's use of the water frontage and this finding is supported by the record. Any inconvenience caused by 454 the Hylan pier in restricting Atwood's ability to enter a boat stall from a particular side of the structure, particularly when an alternative is available, does not interfere with the reasonable use of his estate. After reviewing the record, we cannot say the trial court was clearly wrong in allowing the Hylans to maintain the pier on their own tract of lakebed land. This argument lacks merit. Atwood also argues that he has acquired a servitude of passage over certain lake waters necessary for his boats to gain access to a particular stall. The owner of an estate that does not have access to a public road or waterway may claim a right of passage over neighboring property to the nearest public pathway. LSA-C.C. Art. 689. At trial, the president of the Commission stated that Lake Claiborne was dedicated to public use. Here, Atwood's estate is not blocked from access to the public lakefront. Thus, the statute creating the right of passage is not applicable under the facts and circumstances of this case. This argument is meritless. Damages The Hylans argue the trial court erred in refusing to award damages for travel expenses and emotional distress, and in denying attorney fees. Damages for mental anguish may be awarded to persons whose property was damaged by intentional or illegal acts, by acts giving rise to strict liability, by acts amounting to a continuing nuisance, or where the property owner was present at the time or shortly after the damage was negligently inflicted and suffered a psychic trauma similar to a physical injury as a direct result of the accident. Simmons v. Board of Com'rs of Bossier Levee Dist., 624 So. 2d 935 (La.App. 2d Cir.1993); Farr v. Johnson, 308 So. 2d 884 (La.App. 2d Cir. 1975). Here, the Hylans failed to prove that any such property damage occurred. Although David Hylan testified that he experienced frustration and tension as a result of the property dispute, he did not present any evidence that he suffered a psychic trauma requiring medical treatment. Consequently, the Hylans are not entitled to recover for mental anguish or emotional distress. The trial court has discretion to decide whether to award reasonable attorney fees. Salsbury v. Salsbury, 27,062 (La.App.2d Cir. 6/21/95), 658 So. 2d 734. After reviewing the record, we cannot say the trial court abused its discretion in refusing to award damages and attorney fees to the Hylans. This assignment of error lacks merit. CONCLUSION For the foregoing reasons, that part of the judgment denying Atwood's demand for removal of the Hylan pier, and denying the Hylans' claims for damages and attorney fees is affirmed. That part of the judgment ordering Atwood to remove a portion of his pier and boathouse is reversed. We hereby amend the judgment to grant Atwood a predial servitude on the land occupied by his boathouse and pier. In addition, this servitude shall include an area of four feet extending around the perimeter of the entire Atwood structure to allow access for repair and maintenance. Further, this matter is remanded to the trial court for a determination of the value of the servitude. Costs of this appeal are assessed one-half to appellant, Ronald Atwood, and one-half to appellants, David and Edwina Hylan. AFFIRMED IN PART; AMENDED IN PART; REVERSED IN PART AND REMANDED. STEWART, J., concurs.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1110725/	925 So. 2d 1202 (2006) Kathleen PUMPHREY v. The CITY OF NEW ORLEANS. Darlene Rizzuto v. The City of New Orleans. Fred Farve, Jr. v. The City of New Orleans. Michael Ricks and Vivian Ricks v. The City of New Orleans. Barbara Ellis v. The City of New Orleans. Herbert Craig v. The City of New Orleans. A. Ray Piattoly v. The City of New Orleans. Patrick Murphy v. The City of New Orleans. Ignatius James v. The City of New Orleans. No. 2005-C-979. Supreme Court of Louisiana. April 4, 2006. 1204 Penya Moses-Fields, City Attorney, Evelyn F. Pugh, Chief Deputy City Attorney, Thomas A. Robichaux, Heather M. Valliant, Franz L. Zibilich, Assistant City Attorneys, for applicant. Silbert & Garson, Robert J. Garon, Tamica J. Cryer, New Orleans, William G. Merritt, for respondent. KNOLL, Justice. This civil case addresses the legal question of whether La.Rev.Stat. 33:3062(B) exempts the City of New Orleans with regard to its self-funded employee health care insurance plan from the penalty provisions of La.Rev.Stat. 22:657(A). Plaintiffs filed individual suits seeking penalties and attorneys fees for non-payment and/or untimely payment of insurance benefits, which were due and payable to plaintiffs, under the City of New Orleans's self-funded employee health care plan. After consolidation of these suits, the City of New Orleans ("City") filed a petition for declaratory judgment in all of the consolidated cases seeking a declaration that La.Rev.Stat. 33:3062(B) exempted the City with regard to its self-funded health plan from the penalty provisions of La.Rev.Stat. 22:657(A). The district court entered judgment against the City holding La.Rev.Stat. 33:3062 does not exempt the City or its health plan from the provisions of La.Rev.Stat. 22:657. The court of appeal affirmed. We granted writ primarily to resolve the alleged conflict between La. Rev. Stats. 22:657(C) and 33:3062(B) to determine whether La.Rev. Stat. 33:3062(B) exempts the City's health plan from the penalty provisions of La. Rev.Stat. 22:657(A). Pumphrey v. City of New Orleans, 05-0979 (La.12/16/05), 917 So. 2d 1085. For the following reasons, we find the provisions of La.Rev.Stat. 33:3062(B) clearly and explicitly exempt the City's health plan from the penalty provisions of La.Rev.Stat. 22:657(A) and render declaratory judgment in favor of the City. FACTS AND PROCEDURAL HISTORY On January 1, 1978, the City became self-insured as to health care coverage for its employees and contracted with various 1205 vendors for administrative services in connection with its health care and hospitalization plan. The City offered as a benefit to its employees, retirees, and their dependants, the option of participating in the City's self-funded health care plan or participating in its preferred provider organization (PPO) health care plan. In March 1991, the City entered into a contract with Total Benefits Services ("Total") to administer its health care plan, and then in November 1991, the City entered into a contract with Group Insurance Administration of Louisiana ("Group") to secure medical service discounts through the use of Group's preferred provider network and to manage the PPO health care program. At all times relevant herein, the City has maintained a self-funded health care plan for the benefit of its employees, retired employees, and their families. This consolidated matter arises out of multiple Petitions for Damages brought on behalf of eligible participants in the City's self-funded health care plan.[1] The plaintiffs, Kathleen Pumphrey, Darlene Rizzuto, Fred Farve, Jr., Michael and Vivian Ricks, Barbara Ellis, Herbert Craig, A. Ray Piattoly, Patrick Murphy, and Ignatius James, are seeking penalties and attorneys fees for non-payment and/or untimely payment of insurance benefits, which were due and payable to plaintiffs, under the plaintiffs' participation in the City's self-funded employee health care plan, in accordance with La.Rev.Stat. 22:657. Plaintiffs alleged more than thirty days had elapsed from the date upon which the plaintiffs submitted written notice and proof of claim on covered medical bills to the City's self-funded health care plan. Plaintiffs further contended the City had arbitrarily and capriciously delayed payment of benefits due or had arbitrarily and capriciously paid claims beyond thirty days after submission. Additionally, plaintiffs alleged the City breached its fiduciary duty of good faith and fair dealings and its contractual duties to the plaintiffs as a result of its arbitrary and capricious failure to pay claims. As a result of the City's actions, the plaintiffs alleged they suffered mental anguish and pain and suffering, all of which entitled them "to recover damages as are reasonable in the premises." After filing her petition for damages, plaintiff, Darlene Rizzuto, filed a petition for declaratory judgment on March 26, 1993, to determine whether the penalty and attorney fees provision of La.Rev.Stat. 22:657 applies to the City and its self-funded health care plan. The Fourth Circuit 1206 in Rizzuto v. City of New Orleans, 94-1016 (La. App. 4 Cir. 1/19/95), 650 So. 2d 341, affirmed the district court's declaratory judgment rendered in favor of plaintiff, which held that the provisions of La.Rev. Stat. 22:657 apply to the City, a political subdivision of the State of Louisiana, with regard to it self-funded health care plan. The Rizzuto court found the broad based language of La.Rev.Stat. 22:657 mandates the imposition of penalties on any entity, including "corporation and other organization," which fails to timely pay health benefits with the only exclusion for "collectively bargained union welfare plans other than health and accident plans." 94-1016 at p. 4, 650 So.2d at 343. The court noted that although La.Rev.Stat. 22:657(C) sets forth an illustrative list of included entities within its provisions, the list is not exhaustive, and when the Legislature included the State of Louisiana as one of the entities within the provisions, the court found the broad-based language also included a self-funded health care plan run by a political subdivision of the State. Id., at pp. 4-5, 650 So.2d at 343. Relying on a definition of "organization" that includes "government or governmental subdivision or agency," the court concluded the State's political subdivisions are bound by La.Rev. Stat. 22:657 because political subdivisions were not specifically excluded and the State of Louisiana was specifically included. Id., at p. 5, 343-44. Subsequently, the City and all the plaintiffs filed a joint motion to consolidate, which was granted on July 20, 1998, by order signed by the district court. After consolidation of the cases, the City filed the petition for declaratory judgment at issue in this case, seeking a declaration that La.Rev.Stat. 33:3062 exempts the City with regard to its health care plan from the penalty provisions of La.Rev.Stat. 22:657. The district court found in plaintiffs' favor, reasoning: The Fourth Circuit upheld the applicability of La. R.S. 22:657 to the City's health plan in Rizzuto v. City of New Orleans, 94-[1016] (La. App. 4 Cir. 1/19/95), 650 So. 2d 341. Rizzuto clearly held that La. R.S. 22:657 does apply to the City's health plan and that the City violated the statute. Consequently, the court in Rizzuto ordered the City to pay the proper penalties and attorney's fees. The original text of La. R.S. 22:657 did not include the term "self-insurers." However, "self-insurers" was added to both the heading and subsection C in the 1979 amendment to the statute. This amendment reveals the legislature's intent that self-funded health insurance plans are to be controlled by La. R.S. 22:675. La. R.S. 22:657 has been amended twice since the enactment of La. R.S. 33:3062; neither amendment repealed subsection C. It is clear that the wording of the text in La. R.S. 22:657, the actions of the legislature, as well as the jurisprudence, contradict the position of the City. Accordingly, this Court finds that La. R.S. 33:3062 does not exempt the City from the provisions of La. R.S. 22:657. The Court of Appeal affirmed the district court's decision in an unpublished opinion, finding the law of the case doctrine precluded its reconsideration of the appeal: The City contends, as it did in Rizzuto, that the trial court erred when it held that the provisions of La. R.S. 22:657 apply to the City with regard to its self-funded health care plan. This Court has previously decided that issue [in] Rizzuto. In Rizzuto, this court affirmed the trial judge's holding that La. R.S. 22:657 applied to the City's self-funded health care plan. In Kiefer v. Southern Freightways, Inc., 95-2037, p. 5 (La.App. 4 Cir. 1207 12/27/96), 686 So. 2d 1041, 1046, this Court dealt with the issue of whether a defendant should be barred by the "law of the case" doctrine from re-urging an argument in an appeal which was presented, and ultimately rejected, in a previous appeal even though not all parties were in the appeal at issue were parties in the prior appeal. * * * In the present appeal, the law of the case doctrine is being applied "against" the City and the City was, of course, a party at the time of our decision in the previous appeal. The City had a full opportunity to present its argument in the previous appeal. Thus, this court has already decided the exact issue in one of the consolidated cases; the same ruling applies and should be adopted to all of the cases concerning the instant appeal. This Court granted the City's writ application to determine whether La.Rev.Stat. 33:3062 exempts the City with regard to its health plan from the penalty provision of La.Rev.Stat. 22:657(A) and to resolve the alleged conflict between the provisions of La.Rev.Stat. 33:3062(B) and La.Rev. Stat. 22:657(C). LAW AND ANALYSIS Before we engage in any statutory interpretation, however, we examine first the law of the case doctrine and its applicability in the present case. Law of the Case Doctrine In Day v. Campbell-Grosjean Roofing & Sheet Metal Corp., 260 La. 325, 256 So. 2d 105, 107 (La.1972), this Court explained with Justice Tate as organ for the Court: With regard to an appellate court, the `law of the case' refers to a policy by which the court will not, on a subsequent appeal, reconsider prior rulings in the same case. This policy applies only against those who were parties to the case when the former appellate decision was rendered and who thus had their day in court. Among reasons assigned for application of the policy are: the avoidance of indefinite relitigation of the same issue; the desirability of consistency of the result in the same litigation; and the efficiency, and the essential fairness to both parties, of affording a single opportunity for the argument and decision of the matter at issue. Nevertheless, the law-of-the-case principle is applied merely as a discretionary guide: Argument is barred where there is merely doubt as to the correctness of the former ruling, but not in cases of palpable former error or so mechanically as to accomplish manifest injustice. Further, the law-of-the-case principle is not applied so as to prevent a higher court from examining the correctness of the ruling of the previous court. Preliminarily, we observe the principle of law of the case has no bearing upon our decision today. Pitre v. Louisiana Tech University, 95-1466 (La.5/10/96), 673 So. 2d 585, 589. Under this doctrine, courts of appeal generally refuse to reconsider their own rulings of law on a subsequent appeal in the same case. Id.; Garrison v. St. Charles Gen. Hosp., 03-0423, p. 1 (La.4/25/03), 845 So. 2d 1047, 1047 (per curiam). However, this principle is not applied to prevent a higher court from examining the correctness of the ruling of an intermediate appellate court as it "merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power." Messinger v. Anderson, 225 U.S. 436, 444, 32 S. Ct. 739, 740, 56 L. Ed. 1152 (1912). The law of the case doctrine must never be applied as a restraint on the power and authority of the court in developing law 1208 and, therefore, must never be employed if such would restrain the development of law. As this Court is not bound by the doctrine, we further find the court of appeal erred in its discretionary application of the doctrine in the present case. Based on our reading of the court of appeal's earlier disposition in the Rizzuto case in conjunction with a review of the record in Rizzuto submitted as an exhibit in the present case, the only issue resolved by the Rizzuto court was the correctness of the district court's finding plaintiff was entitled to a declaration that La.Rev.Stat. 22:657 applied to the City's health plan. No discussion of the La.Rev.Stat. 33:3062 exemption was had, and therefore, the Rizzuto court did not rule on the issue in this case, i.e., the applicability of La.Rev.Stat. 33:3062(B) to exempt the City's health plan from the penalty provision of La.Rev.Stat. 22:657(A). Under these circumstances, we find the court of appeal clearly erred in applying the law of the case doctrine. We look now to a discussion of the merits of this case, i.e., the application of the La.Rev.Stat. 33:3062(B) exemption. Statutory Construction We begin by noting the application of La.Rev.Stat. 33:3062(B) as an exemption from La.Rev.Stat. 22:657(A)'s penalty provision is an issue of first impression for this Court. We do acknowledge this Court in Caraway v. Royale Airlines, Inc., 579 So. 2d 424, 429 (La.1991), found the City of Bossier City was liable for penalties and attorney fees under La.Rev.Stat. 22:657(A), holding the record supported the conclusion the City of Bossier City was without just and reasonable grounds in failing to pay benefits to plaintiff under its health plan. However, we find it evident the Caraway court did not consider the exemption from the penalty provisions of La.Rev.Stat. 22:657(A) contained in La. Rev.Stat. 33:3062(B).[2] Therefore, we turn to a discussion of the provisions at issue in this case. La.Rev.Stat. 22:657 provides, in pertinent part: A. All claims arising under the terms of health and accident contracts issued in this state, except as provided in Subsection B, shall be paid not more than thirty days from the date upon which written notice and proof of claim, in the form required by the terms of the policy, are furnished to the insurer unless just and reasonable grounds, such as would put a reasonable and prudent businessman on his guard, exist. The insurer shall make payment at least every thirty days to the assured during that part of the period of his disability covered by the policy or contract of insurance during which the insured is entitled to such payments. Failure to comply with the provisions of this Section shall subject the insurer to a penalty payable to the 1209 insured of double the amount of the health and accident benefits due under the terms of the policy or contract during the period of delay, together with attorney's fees to be determined by the court. Any court of competent jurisdiction in the parish where the insured lives or has his domicile, excepting a justice of the peace court, shall have jurisdiction to try such cases. C. Any person, partnership, corporation or other organization, or the State of Louisiana which provides or contracts to provide health and accident benefit coverage as a self-insurer for his or its employees, stockholders or any other persons, shall be subject to the provisions of this Section, including the provisions relating to penalties and attorney fees, without regard to whether the person or organization is a commercial insurer provided, however, this Section shall not apply to collectively bargained union welfare plans other than health and accident plans. La.Rev.Stat. 33:3062 provides: A. The governing authority of any municipality, parish, school board, or inter-local risk management agency authorized pursuant to R.S. 33:1341, et seq., hereafter referred to in this Part as the "governing authority", may contract for any type of insurance protection for itself or its officers and employees including self insurance or shared risk programs, provided the term of coverage of such insurance does not exceed ten years, and such governing authority may make such advance payments of the cost of such insurance as it shall deem appropriate. B. A governing authority participating in a program of self-insurance or shared risk shall not constitute an insurance company or an insurer under the laws of this state, and the development and administration of such a program shall not constitute doing an insurance business. An agreement or contract entered into by any such governing authority providing for the creation and maintenance of self-insurance or shared risk programs shall not be deemed to constitute insurance as defined by R.S. 22:5, nor shall such a program be subject to the provisions of Chapter 1 of Title 22 of the Louisiana Revised Statutes of 1950. In resolving the issue of whether La.Rev.Stat. 33:3062 may be applied as an exemption in the instant situation, we must keep certain principles of judicial interpretation of statutes in mind. The fundamental question in all cases of statutory interpretation is legislative intent and the ascertainment of the reason or reasons that prompted the Legislature to enact the law. In re Succession of Boyter, 99-0761, p. 9 (La.1/7/00), 756 So. 2d 1122, 1128. The rules of statutory construction are designed to ascertain and enforce the intent of the Legislature. Id.; Stogner v. Stogner, 98-3044, p. 5 (La.7/7/99), 739 So. 2d 762, 766. Legislation is the solemn expression of legislative will, and therefore, interpretation of a law involves primarily a search for the Legislature's intent. La. Rev.Stat. § 1:4 (2004); La. Civ.Code art. 2 (2004); Lockett v. State, Dept. of Transp. and Development, 03-1767, p. 3 (La.2/25/04), 869 So. 2d 87, 90. When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the Legislature. La. Civ.Code art. 9 (2004); Lockett, 03-1767 at p. 3, 869 So.2d at 90-91; Conerly v. State, 97-0871, p. 3-4 (La.7/8/98), 714 So. 2d 709, 710-11. When the language of the law is susceptible of different meanings, it must be interpreted as having the meaning that best conforms to the purpose of the law, and the words of law must be given their generally prevailing 1210 meaning. La. Civ.Code arts. 10 and 11 (2004); Lockett, 03-1767 at p. 4, 869 So.2d at 91; Ruiz v. Oniate, 97-2412, p. 4 (La.5/19/98), 713 So. 2d 442, 444. When the words of a law are ambiguous, their meaning must be sought by examining the context in which they occur and the text of the law as a whole, and laws on the same subject matter must be interpreted in reference to each other. La.Rev.Stat. § 1:3 (2004); La. Civ.Code. arts. 12 and 13; Lockett, 03-1767 at p. 4, 869 So.2d at 91. The meaning and intent of a law is determined by considering the law in its entirety and all other laws on the same subject matter and placing a construction on the provision in question that is consistent with the express terms of the law and with the obvious intent of the Legislature in enacting it. Boyter, 99-0761 at p. 9, 756 So.2d at 1129; Stogner, 98-3044 at p. 5, 739 So.2d at 766. The statute must, therefore, be applied and interpreted in a manner, which is consistent with logic and the presumed fair purpose and intention of the Legislature in passing it. Boyter, 99-0761 at p. 9, 756 So.2d at 1129. This is because the rules of statutory construction require that the general intent and purpose of the Legislature in enacting the law must, if possible, be given effect. Id.; Backhus v. Transit Cas. Co., 549 So. 2d 283, 289 (La. 1989). Courts should give effect to all parts of a statute and should not give a statute an interpretation that makes any part superfluous or meaningless, if that result can be avoided. Boyter, 99-0761 at p. 9, 756 So.2d at 1129. It is likewise presumed that the intention of the legislative branch is to achieve a consistent body of law. Stogner, 98-3044 at p. 5, 739 So.2d at 766. La. Civ.Code art. 13 provides, where two statutes deal with the same subject matter, they should be harmonized if possible. Kennedy v. Kennedy, 96-0732, 96-0741, p. 2 (La.11/25/96), 699 So. 2d 351, 358 (on rehearing). However, if there is a conflict, the statute specifically directed to the matter at issue must prevail as an exception to the statute more general in character. Kennedy, 96-0732, 96-0741 at p. 2, 699 So.2d at 358. Under general rules of statutory construction, the latest expression of the legislative will is considered controlling and prior enactments in conflict are considered as tacitly repealed in the absence of an express repealing clause. La. Civ.Code art. 8 (2004); State v. Board of Com'rs of Caddo Levee Dist., 188 La. 1, 175 So. 678, 681 (La.1937); Norman J. Singer, Sutherland Statutes and Statutory Construction § 23:9 (6th ed.2002). Reading the statutes at issue in the present case in pari materia, we find the provisions of La.Rev.Stat. 33:3062(B) exempt the City in regard to its self-funded health plan from the penalty provisions of La.Rev.Stat. 22:657(A). In 1986, the Legislature enacted the provisions of La. Rev.Stat. 33:3062 by clear and express language to provide that governing authorities participating in programs of self-insurance "shall not constitute an insurance company or an insurer under the laws of this state," nor shall such programs "be subject to the provisions of Chapter 1 of Title 22 of the Louisiana Revised Statutes of 1950." See Acts 1986, No. 973, § 1.[3] Chapter 1 of Title 22 of the Revised Statutes codifies the Louisiana Insurance Code and presently consists of La. Rev. Stats. 22:1 through 1520. The penalty provisions 1211 of La.Rev.Stat. 22:657are obviously contained and included in this first chapter of Title 22. Moreover, La.Rev.Stat. 33:3062(A) clearly defines the term "governing authority" as used in its provisions as the "governing authority of any municipality, parish, school board, or interlocal risk management agency authorized pursuant to R.S. 33:1341." Since January 1, 1978, the City has been self-insured as to health care coverage for its employees, and as a self-insured governing authority of a municipality, i.e., the City of New Orleans, the City's program of self-insurance "shall not constitute an insurance company or an insurer under the laws of this state," "nor shall such a program be subject to the provisions of Chapter 1 of Title 22 of the Louisiana Revised Statutes of 1950", including La. Rev.Stat. 22:657. Thus, we find the unambiguous language of La.Rev.Stat. 33:3062(B) specifically provides the City's program of self-insurance shall not be subject to the penalty provisions of La.Rev. Stat. 22:657(A). On the other hand, the district court and the plaintiffs assert the language of La. Rev.Stat. 22:657(C) contradicts this conclusion. The Legislature in 1979 enacted La. Rev.Stat. 22:657(C) to provide that "[a]ny person, partnership, corporation or other organization, or the State of Louisiana ... shall be subject to the provisions of this Section, including the provisions relating to penalties and attorney's fees." See Acts 1979, No. 240, § 1. We note first off that La.Rev.Stat. 22:657(C) has not been amended or repealed since its date of enactment in 1979, therefore making La.Rev. Stat. 33:3062 the latest expression of the legislative will, which is considered controlling and prior enactments in conflict are considered as tacitly repealed in the absence of an express repealing clause. See La. Civ.Code art. 8; State v. Board of Com'rs of Caddo Levee Dist., 175 So. at 681; Singer, supra. Nevertheless, we do not find a conflict between the prior enacted provisions of La.Rev.Stat. 22:657(C) and La.Rev.Stat. 33:3062(B), as we do not find La.Rev.Stat. 22:657(C), and accordingly the penalty provisions of La.Rev.Stat. 22:657(A), are applicable to the City's program of self-insurance. It is a fundamental principle in the construction of statutes that the meaning of a word or phrase may be ascertained by the meaning of other words or phrases with which it is associated. B.W.S. Corp. v. Evangeline Parish Police Jury, 293 So. 2d 233, 236 (La.App. 3d Cir. 1974); Board of Trustees of East Baton Rouge Mortg. Finance Authority v. All Taxpayers, 336 So. 2d 306, 312 (La.App. 1 Cir.1976). Under the ejusdem generis rule of statutory construction, general words, such as "other, etc.", following an enumeration of particular or specific classes or things are to take color from the specific, so that the general words are restricted to a sense analogous to the less general. Hall v. Rosteet, 247 La. 45, 169 So. 2d 903, 907-08 (1964). Thus, the general words are not to be construed in their widest extent, but are to be held as applying only to such classes of things of the same general kind as those specifically mentioned. Continental Group, Inc. v. Allison, 404 So. 2d 428, 431, n. 4 (La.1981). Moreover, the law shall be applied as written, and therefore, a court must give effect to the literal application of the language of a statute, including its grammatical construction, except in the rare case where such application will produce absurd or unreasonable results. United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 242, 109 S.Ct. 1026,-1031, 103 L. Ed. 2d 290 (1989); La. Civ. Code art. 9. In such manner, punctuation as well as grammatical construction in general, although never relied upon to defeat 1212 the obvious intent, may operate as an aid in the construction and interpretation of the statute. Joy v. City of St. Louis, 138 U.S. 1, 32, 11 S. Ct. 243, 251, 34 L. Ed. 843 (1891). In light of these general rules of construction and the specific wording found in La.Rev.Stat. 22:657(C)"[a]ny person, partnership, corporation or other organization, or the State of Louisiana"we can come to no other conclusion, but that a political subdivision of the State, such as the City, was not contemplated by the Legislature to be covered by the adoption of the term "other organization." In accordance with the rule of ejusdem generis, the general phrase "other organization" should not be construed in its widest extent, but should be applied only to such classes of things of the same general kind as those specifically enumerated with which it is associated.[4] Given a literal application of the conjunctions and punctuation utilized by the Legislature in this provision, it is evident the enumerated terms with which the term "other organization" is associated are those terms preceding the first conjunction "or" in the statute"Any person, partnership, corporation or other organization." Moreover, the use of a comma and the second conjunction "or" clearly separates the first set of classes enumerated, "[a]ny person, partnership, corporation or other organization," from the second enumerated class, "the State of Louisiana." In this sense, the first two commas are clearly employed to separate the items listed in the first grammatical structural unit, "[a]ny person, partnership, corporation or other organization," whereas the third comma separates the second grammatical structural unit, the State of Louisiana, from the first grammatical structural unit. Likewise, the first "or" serves to conjoin the phrase "other organization" with the other enumerated terms within the first unit, whereas the second "or" serves to conjoin the first unit and the second unit. Clearly, the statute contains two conjoined structural units, and the rules of statutory construction dictate that the "catchall" phrase, "other organization," belonging to the first structural unit, must not be interpreted in conjunction with the enumerated term contained in the second structural unit, "the State of Louisiana." This construction is further supported by the legislative history of La.Rev.Stat. 22:657(C). The original bill, House Bill No. 18 of the 1979 Regular Session, proposed the following language for Subsection C: "Any person, partnership, corporation or other organization which provides or contracts to provide health and accident benefit coverage as a self-insurer for his or its employees, stockholders, or any other persons, shall be subject to the provisions of this Section, including the provisions relating to penalties and attorney fees, without regard to whether the person or organization is a commercial insurer." See Original House Bill No. 18, Regular Session, 1979. The phrase"or the State of Louisiana"was later added to the original language of the bill and offset by a third comma at the recommendation of the House Committee on Commerce. See Minutes of Meeting of House Committee on Commerce, April 25, 1979, p. 2. Given this legislative history and the subsequent amendment of the original bill to include the State of Louisiana, it is logical to conclude the Legislature did not intend the term "other organization" to be interpreted in association with the later added term, "the State of Louisiana." Therefore, we find the Rizzuto court erred in construing the term "other organization" in this penalty provision in association 1213 with "the State of Louisiana," to find a political subdivision an organization contemplated by the Legislature to be subjected to the penalty provisions of La.Rev. Stat. 22:657(A). Finally, in light of this construction of the provisions at issue, La.Rev.Stat. 33:3062(B) as the specific statute governing the self-insurance of municipalities, such as the City of New Orleans, prevails over the general provisions of the Insurance Code, namely La.Rev.Stat. 22:657. CONCLUSION In conclusion, we find La.Rev.Stat. 33:3062(B) exempts the City with regard to its self-funded health care plan from the penalty provisions of La.Rev.Stat. 22:657(A). We overrule the Caraway decision to the extent it is inconsistent with the holding herein. Additionally, we find this Court is not bound by the doctrine of the law of the case in this matter and further, the court of appeal erred in its application of the doctrine. DECREE For the foregoing reasons, we reverse the judgment of the court of appeal and render declaratory judgment in favor of defendant, the City of New Orleans. REVERSED. NOTES [1] Kathleen Pumphrey v. City of New Orleans, No. 93-158, CDC for the Parish of Orleans, Div. "G", 04-CA-889; Darlene Rizzuto v. City of New Orleans, No. 93-159, CDC for the Parish of Orleans, Div. "C", 04-CA-890; Fred Farve, Jr. v. City of New Orleans, No. 93-160, CDC for the Parish of Orleans, Div. "A", 04-CA-891; Michael Ricks and Vivian Ricks v. City of New Orleans, No. 93-161, CDC for the Parish of Orleans, Div. "H", 04-CA-892; Barbara Ellis v. City of New Orleans, No. 93-162, CDC for the Parish of Orleans, Div. "D", 04-CA-893; Herbert Craig v. City of New Orleans, No. 93-163, CDC for the Parish of Orleans, Div. "A", 04-CA-894; A Ray Piattoly v. City of New Orleans, No. 93-164, CDC for the Parish of Orleans, Div. "C", 04-CA-895; Patrick Murphy v. City of New Orleans, No. 93-165, CDC for the Parish of Orleans, Div. "J", 04-CA-896; and Ignatius James v. City of New Orleans, No. 93-2970, CDC for the Parish of Orleans, Div. "G", 04-CA-897. All suits were filed on January 5, 1993, except James v. City of New Orleans, which was filed on February 19, 1993. All petitions are identical except for the names of the plaintiffs. The divisions cited herein reflect the division letters stamped on the original petitions as filed. Notably, in the Order to Consolidate, the divisions do not correspond with the division letter stamp, but are listed as follows: Pumphrey, Div. "G"; Rizzuto, Div. "I"; Farve, Div. "M"; Ricks, Div. "H"; Ellis, Div. "N"; Craig, Div. "M"; Piattoly, Div. "I"; Murphy, Div. "J"; James, Div. "G". [2] Interestingly, the Caraway plaintiffs filed suit on February 20, 1987, for recovery of health insurance benefits due to plaintiffs under the City of Bossier City's health and hospitalization insurance, which covered plaintiff at the time of her surgery on July 30, 1986. During the course of the surgery, potentially life-threatening complications arose. Medical expenses from the surgery and treatment of the complications totaled $78,165.65. The City of Bossier City plan paid $1166 in benefits, the amount it alleged it was responsible for as secondary plan under its non-duplication of benefits provision. On July 14, 1986, the City of Bossier City plan had agreed to extend coverage as a secondary plan. Ironically, La.Rev.Stat. 33:3062 became effective on July 14, 1986. Notably, the Caraway court did not find the City of Bossier City liable under La.Rev.Stat. 22:657(C), but rather found liability under the general penalty provision of La.Rev.Stat. 22:657(A). Specifically, even though effective, the Caraway court did not address La. Rev.Stat. 33:3062 or its exemption. [3] This section, enacted as La.Rev.Stat. 33:3054 by Acts 1986, No. 973, § 1, was redesignated as La.Rev.Stat. 33:3062, pursuant to the statutory revision authority of the Louisiana State Law Institute. See Historical and Statutory Notes, La.Rev.Stat. Ann. 33:3062 (West 2002). [4] For example, "other organization" would refer to that which is within the same class as person, partnership, or corporation, such as a limited liability company.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1912183/	816 So. 2d 885 (2002) STATE of Louisiana v. Kendrick DANGERFIELD & Lorenzo Taylor. No. 2000-KA-2359. Court of Appeal of Louisiana, Fourth Circuit. April 3, 2002. 890 Harry F. Connick, District Attorney, Anne M. Dickerson, Assistant District Attorney, New Orleans, LA., for State of Louisiana. Christopher A. Aberle, Mandeville, LA, for Lorenzo Taylor. Kevin V. Boshea, James A. Williams, Michelle H. Hesni, Davidson S. Ehle, III, Williams Boshea & Ehle, L.L.C., Gretna, LA, for Kendrick Dangerfield. (Court composed of Judge CHARLES R. JONES, Judge PATRICIA RIVET MURRAY and Judge MAX N. TOBIAS, JR.). JONES, Judge. Appellants, Kendrick Dangerfield and Lorenzo Taylor, appeal their convictions on charges of one count of aggravated kidnapping, one count of attempted second-degree murder, and one count of attempted first-degree feticide. Both were sentenced to life imprisonment without benefit of parole, probation or suspension of sentence on the aggravated kidnapping charge, and to seven and one-half years on the attempted first degree feticide charge, with their sentences to run concurrently. On the attempted second-degree murder charge, Kendrick Dangerfield received a concurrent twenty-five year prison term, while Lorenzo Taylor was sentenced to a concurrent fifty-year prison term.[1] The district court denied Dangerfield's and Taylor's motions to reconsider sentence. STATEMENT OF FACTS On February 14, 1999, Brian Cage and Leroy "Skeeter" Edwards testified at trial that they planned to attend the Bacchus parade. Mr. Cage met Mr. Edwards at the Kenner residence Mr. Edwards shared with his pregnant girlfriend, Troy Robinson. Miss Robinson was not feeling well and did not accompany them to the parade. Miss Robinson's children were with her sister, so she planned to stay at home and rest. Mr. Edwards exchanged vehicles 891 with Miss Robinson and drove himself and Mr. Cage to the parade at approximately 9:00 p.m. Mr. Edwards and Mr. Cage viewed the parade for approximately an hour and then decided to return to Mr. Edwards' residence. En route, Mr. Edwards received a phone call in which the caller told him that his girlfriend had been kidnapped and demanded a $100,000 ransom for her safe return. At first, Mr. Edwards thought the call was a prank. He called his home and when he received no answer, he began phoning and canvassing relatives and friends in an attempt to locate Miss Robinson. About fifteen minutes after the first call, Mr. Edwards received two additional calls from the kidnapper. During the second of those calls, the kidnapper allowed Miss Robinson to speak to Mr. Edwards. Mr. Edwards immediately called the police, and rushed home to find both Miss Robinson and his car missing. At approximately 2:00 a.m. on February 15, 1999, Detective Michael Cunningham and Officer Kenneth Marroccoli of the Kenner Police Department responded to Mr. Edwards' call concerning Miss Robinson's abduction. Detective Cunningham and Officer Marroccoli surveyed the ransacked residence. As Detective Cunningham was speaking to Mr. Edwards, New Orleans Police Detective Bernard Crowden responded to a call of a shooting at Phillip and Clara Streets in New Orleans. When Detective Crowden arrived on the shooting scene, he learned that Miss Robinson had been shot eight times and was being transported to Charity Hospital. Detective Crowden directed the recovery of evidence from the scene, which included live rounds of ammunition, spent bullet casings, duct tape, a hat and Miss Robinson's shoes and clothing. Charity Hospital orthopedic surgeon, Dr. Joseph Hsu, testified at trial that he examined Miss Robinson in the early morning hours of February 15, 1999. She had suffered five life threatening gunshot wounds to her extremities; one shattered the bone in her right leg, causing massive blood loss. Dr. Hsu determined that Miss Robinson required emergency surgery; however, he opined that surgery was particularly risky to her unborn child. Dr. Shawn Wengroff of Charity's Obstetrics and Gynecology Department consulted with Dr. Hsu to evaluate and monitor the fetus' condition during the three-hour corrective surgery. On February 17, 1999, Detective Cunningham testified that he interviewed Miss Robinson at the hospital, and took a taped statement from her in which she related that on the night of February 14, 1999, Mr. Edwards left their residence at about 9:00 p.m. She stated that approximately fifteen minutes after Mr. Edwards left, she heard a knock on the front door. Thinking it was probably a neighborhood child looking to play with her children, Miss Robinson opened the door. As she did so, "Mike" and "Donnie" burst in, brandishing weapons, and demanding that she "show [them] where it's at." As the intruders searched her house, Miss Robinson tried to explain that she did not know what they were talking about. "Mike" ordered "Donnie" to sit with Miss Robinson on the sofa and watch her, as "Mike" continued to ransack the residence. When their efforts proved fruitless, the intruders bound Miss Robinson's arms and covered her eyes with duct tape. However, unbeknownst to the intruders, they left a small opening in the tape over her eyes, thus enabling her to see what was going on around her. "Mike" put a hat on Miss Robinson to hide the tape on her face, retrieved the keys to Mr. Edwards' Cadillac, placed Miss Robinson in the car and drove away, as "Donnie" followed in another vehicle. 892 Miss Robinson recounted the route "Mike" drove from Kenner into Orleans Parish. The trio stopped at "Donnie's" house at Phillip and Clara Streets. Then they proceeded to Martin Luther King, Jr. Boulevard and South Galvez Street, where "Mike" made a call from a public telephone to Mr. Edwards. As "Mike" made the phone call, "Donnie" stood guard. "Mike" then drove Miss Robinson to the area of South Broad Street and Washington Avenue, where "Mike" stopped and called Mr. Edwards again. This time "Mike" made Miss Robinson speak with Mr. Edwards, to plead for her life. During the course of this call, she realized that "Donnie" had been trailing them in a red Chevrolet Corsica. After the call, the kidnappers drove Miss Robinson to the Melpomene Housing Project. As he drove, "Mike" threatened Miss Robinson's life. Shortly after this threat, a tire on the Cadillac went flat. "Mike" pulled over and "Donnie" drove up alongside him. They decided to drive the Cadillac to Clara and Clio Streets, where they stopped once again. "Mike" proceeded to wipe down the interior surfaces of the Cadillac and then began rummaging in its trunk. The kidnappers told Miss Robinson that she would be transferred to "Donnie's" car. As she watched, the kidnappers walked to "Donnie's" vehicle and conferred. As they returned to the Cadillac, they drew their guns. When she saw the weapons, Miss Robinson jumped from the Cadillac and ran. "Mike" fired upon her with an Uzi, while "Donnie" shot at her with a 9 millimeter weapon. As Miss Robinson ran, a bullet hit her in her right leg. She fell on her stomach and face, and broke her nose. When "Mike" and "Donnie" approached her as she lay face down on the ground, Miss Robinson feigned death. As they stood over her, she heard one of the kidnappers complain that his gun had jammed and the other one lamented that he ran out of bullets. After she was certain the kidnappers had left the area, she crawled to the end of Clio Street, where two young boys found her and summoned help. Miss Robinson supplied Detective Cunningham with physical descriptions of her assailants. Working from this information, Detective Cunningham compiled two photo lineups from which Miss Robinson identified Kendrick Dangerfield as "Mike" and Lorenzo Taylor as "Donnie". On March 15, 1999, Mr. Edwards and Mr. Cage drove to the scene of the shooting. As Mr. Edwards drove past the site, a man jumped in front of the car, taunting and goading him to fight. The man told Mr. Edwards that he was the person who kidnapped Miss Robinson. Mr. Cage identified the man as Dangerfield. On March 29, 1999, acting upon information received from Detective Cunningham, Detective Crowden prepared and executed search warrants for Dangerfield's residence and vehicle. The search of Dangerfield's vehicle produced three shotgun shells, one live 9-millimeter bullet and a photograph of Dangerfield posing with some friends. Based upon the identification made by Miss Robinson from the photo lineup compiled by Detective Cunningham, Detective Crowden prepared an arrest warrant for Dangerfield. Officer Byron Winbush, the NOPD's firearms expert, reported the results of his examination of three spent cartridges and two live rounds of ammunition collected from the scene at Clara and Clio Streets. He concluded that the two live rounds were 9-millimeter bullets, and that the three 9-millimeter cartridges were fired from the same 9-millimeter weapon. In a supplemental report, Officer Winbush detailed his finding that the bullet recovered during Miss Robinson's surgery was also 9-millimeter caliber. 893 ERRORS PATENT A review of the record for errors patent reveals error in Dangerfield's and Lorenzo's sentences for attempted second-degree murder. The sentence for attempted second-degree murder pursuant to La. R.S. 14(27)30.1 is a term of imprisonment at hard labor without benefit of parole, probation or suspension of sentence. In this case, Dangerfield's and Lorenzo's sentences failed to restrict benefits. Thus, the sentences are illegally lenient. There have been recent changes in the legislature which are encompassed in the Supreme Court decision State v. Williams, XXXX-XXXX, (La.11/28/01), 800 So. 2d 790, that address the issue of illegally lenient sentencing. La.Rev.Stat. Ann. § 15:301.1(A) provides in pertinent part that: .... The failure of a sentencing court to specifically state that all or a portion of the sentence is be served without the benefit of probation, parole or suspension of sentence shall not in any way affect the statutory requirement that all or a portion of the sentence be served without benefit of probation, parole, or suspension of sentence. Considering this provision, the Supreme Court in Williams stated: In instances where these restrictions are not recited in sentencing, La.Rev.Stat. Ann. § 15:301.1(A) deems that those required statutory restrictions are contained in the sentence whether or not imposed by the sentencing court. Additionally, this paragraph self-activates the correction and eliminates the need to remand for a ministerial correction of an illegally lenient sentence which may result from the failure of the sentencing court to impose punishment in conformity with the provided statute. Id. at 798. In accordance with La.Rev.Stat. Ann. § 15:301.1(A) cited in Williams, we find that the statute above self-activates the correction of an illegally lenient sentence and eliminates the need to remand to the district court for resentencing. Thus, this Court will not disturb the sentences imposed on Dangerfield and Lorenzo. DANGERFIELD'S ASSIGNMENT OF ERROR NO. 1 In his first assignment of error, Dangerfield argues that the district court erred in denying his motion for a continuance. La.C.Cr.P. art. 707 requires that a defendant file a written motion for a continuance at least seven days prior to trial, specifically alleging the grounds on which it is based and verified by the affidavit of the defendant or his counsel. Upon written motion and after a contradictory hearing, the court may grant a continuance, but only on a showing that such motion is in the interest of justice. Counsel for Dangerfield made an oral motion to continue prior to calling a jury for commencement of voir dire. An oral motion for a continuance is permitted when the occurrences that allegedly made a continuance necessary rose unexpectedly. State v. Campbell, 99-0892 (La.App. 4 Cir. 1/3/01), 778 So. 2d 636. The granting or denying of the motion to continue lies within the trial court's discretion. La. C. Cr. P. art. 712. Denial of the motion is grounds for reversal only where the defendant shows both abuse of the trial court's discretion and specific prejudice. State v. Borne, 96-1130 (La. App. 4 Cir. 3/19/97), 691 So. 2d 1281, 1284-85. In this case, the defense counsel sought the continuance on a dual basis. First, that he and his co-counsel were fatigued 894 because of preoccupation with an appeal of a life imprisonment matter and an adoption, both of which were completed the day before. Second, the State had only recently turned over a copy of the police report. In the colloquy between the court and all counsel, the State opposed the motion, objecting to having Miss Robinson wait another day to have the case heard. Additionally, the prosecutor pointed out that defense counsel had known for some time about the suspects who had been investigated and eliminated. The judge determined that he was not going to grant the motion because of scheduling conflicts. This Court finds that defense counsel should have been able to prepare a written motion for continuance. Defense counsel admitted that he received the police report "a week and a half ago," belying representations of an unexpected occurrence. Moreover, even though the defense team argued fatigue, it declared itself "prepare[d] to go today." Based on these circumstances, the district judge did not abuse his discretion in denying the oral motion to continue. This assignment of error has no merit. DANGERFIELD'S ASSIGNMENT OF ERROR NO. 2 In a second assignment of error, Dangerfield argues that the district court erred in denying his motion in limine to exclude evidence found in his car. The evidence seized from Dangerfield's car included one 9-millimeter live round and three shotgun shells. Dangerfield maintains that the evidence is irrelevant and of no probative value because the 9-millimeter round was not matched to the bullets recovered during Miss Robinson's surgery and that the perpetrators of this crime did not use a shotgun. Therefore, Dangerfield claims that he was prejudiced by the admission of the evidence as it served no purpose other than to confuse the jury. La. C.E. art. 401 defines relevant evidence as evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. La. C.E. art. 402 provides that all relevant evidence is admissible. If the evidence supports an inference raised by relevant fact, the evidence is admissible. State v. Shepherd, 332 So. 2d 228 (La.1976). To be admissible, demonstrative evidence must be identified and authenticated. La. C.E. art. 901; State v. Richardson, 96-2598 (La. App. 4 Cir. 12/17/97), 703 So. 2d 1371, 1373. As a foundation for admitting demonstrative evidence, it must be established that the object sought to be introduced is more probably than not connected with the case. State v. Duncan, 99-0778 (La.App. 4 Cir. 4/19/00), 761 So. 2d 586, writ den. XXXX-XXXX (La.6/22/01), 794 So. 2d 778. In determining the relevance of evidence, much discretion is afforded the trial judge. State v. Sholes, 99-2414 (La.App. 4 Cir. 3/26/01), 782 So. 2d 691. Miss Robinson testified at trial that one of her assailants shot her with a 9-millimeter weapon. The physical evidence corroborates her testimony because 9-millimeter bullets were removed from her body during surgery and spent 9-millimeter casings littered the shooting scene. We find somewhat problematic the introduction of the shotgun ammunition and the accompanying trial testimony about the shotgun. No evidence that the perpetrators of this crime used a shotgun was introduced at trial. The introduction of the shotgun ammunition was irrelevant to the shooting and we find that the district court erred in admitting it into evidence. However, it appears the error was 895 harmless. The test used in deciding if a trial error is harmless is whether it appears "beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained." Chapman v. California, 386 U.S. 18, 87 S. Ct. 824, 17 L. Ed. 2d 705 (1967). The Chapman standard was later refined in Sullivan v. Louisiana, 508 U.S. 275, 279, 113 S. Ct. 2078, 124 L. Ed. 2d 182 (1993), as follows: Consistent with the jury-trial guarantee, the question [Chapman ] instructs the reviewing court to consider is not what effect the constitutional error might generally be expected to have upon a reasonable jury, but rather what effect it had upon the guilty verdict in the case at hand.... The inquiry, in other words, is not whether, in a trial that occurred without the error, a guilty verdict would surely have been rendered, but whether the guilty verdict actually rendered in this trial was surely unattributable to the error. In this case, the State did not argue that the 9-millimeter round and shotgun shells recovered from Dangerfield's car were directly connected to the shooting. Moreover, Dangerfield's testimony at trial denied any knowledge of the 9-millimeter bullet and offered an explanation for the presence of the shotgun shells in his car. Considering Miss Robinson's unwavering testimony that Dangerfield shot her, we find it highly unlikely that the jury convicted Dangerfield on the basis of the ammunition found in his vehicle. This assignment of error is without merit. DANGERFIELD'S ASSIGNMENT OF ERROR NO. 3 In his third assignment of error, Dangerfield maintains that the district court's erroneous admission of hearsay testimony at trial deprived him of the right to confront and cross-examine his accusers. Hearsay is a statement made out of court offered as evidence in court to prove the truth of the matter asserted by the statement. La. C.E. art. 801(C); State v. Everidge, 96-2665 (La.12/2/97), 702 So. 2d 680, 684. Hearsay is excluded because the value of the statement rests on the credibility of the out-of-court asserter who is not subject to cross-examination and other safeguards of reliability. In order to fall within the definition of hearsay, the statement must be offered to prove the truth of the statement's contents. Id., 702 So.2d at 685. The relationship between the confrontation clause and hearsay evidence was discussed in California v. Green, 399 U.S. 149, 90 S. Ct. 1930, 26 L. Ed. 2d 489 (1970). The Supreme Court recognized that the reasons for excluding hearsay assertions were (1) to insure that the witness will make his assertions under oath, thus impressing him with the seriousness of the matter and subjecting untrue statements to a penalty for perjury; (2) to force the witness to submit to cross-examination, characterized as the "greatest legal engine ever invented for the discovery of truth;" (3) to permit the jury which decides the defendant's fate to observe the demeanor of the witness in making his statements, thus aiding the jury in assessing the witness' credibility. Id. at 158, 90 S. Ct. at 1935. In the present case, Dangerfield complains that Officer Marroccoli and Detectives Crowden and Cunningham were allowed to repeat for the jury various conversations that had taken place among themselves and with Mr. Edwards and Miss Robinson the night of the kidnapping, as well as conversations with confidential sources. Defending the admission of the testimony, the State denies that it is "hearsay" 896 because it was not introduced to show the truth of the matters asserted therein, and argues that it was properly admitted pursuant to the res gestae exception to the hearsay rule. Citing State v. Granier, 592 So. 2d 883, 888 (La.App. 4 Cir.1991), the State notes that a police officer, in explaining his own actions, may refer to statements made to him by other persons involved in the case. Such statements, which also often fall into the exception, are admissible not to prove the truth of the statement being made, but rather are offered to explain the sequence of events leading to the arrest of the defendant and, as such, are not hearsay. Id. The purpose served by the admission of such evidence, referred to as the res gestae, is to complete the story of the crime on trial by proving its immediate context of happenings near in time and place. State v. Walker, 99-2217 (La.App. 4 Cir. 10/31/00), 775 So. 2d 484, 488-89. We find that Officer Marroccoli's testimony and portions of Detectives Crowden and Cunningham's testimony fit the res gestae exception. Officer Marroccoli's testimony fits within the exception because his participation in the investigation of the incident spanned a mere few hours, and Detectives Crowden's and Cunningham's testimony fits within the exception because each explained the course of action he took during the first few hours of his involvement in the case. The Louisiana Supreme Court in State v. Wille, 559 So. 2d 1321, 1331 (La.1990) stated: When an out-of-court statement, such as information received by a police officer during an investigation of a crime, has both an impermissible hearsay aspect and a permissible nonhearsay aspect, the issue of relevancy becomes significantly interrelated with the hearsay issue. If the nonhearsay content of the statement has little or no relevance, then the statement should generally be excluded on both relevance and hearsay grounds. Marginally relevant nonhearsay evidence should not be used as a vehicle to permit the introduction of highly relevant and highly prejudicial hearsay evidence which consists of the substance of an out-of-court assertion that was not made under oath and is not subject to cross-examination at trial. In State v. Hearold, 603 So. 2d 731, 737-38 (La.1992), the Louisiana Supreme Court added: Generally, an explanation of the officer's actions should never be an acceptable basis upon which to admit an out-of-court declaration when the so-called "explanation" involves a direct assertion of criminal activity against the accused.....Absent some unique circumstances in which the explanation of purpose is probative evidence of a contested fact, such hearsay evidence should not be admitted under an "explanation" exception. The probative value of the mere fact that an out-of-court declaration was made is generally outweighed greatly by the likelihood that the jury will consider the statement for the truth of the matter asserted. In this instance, we find that inadmissible hearsay was introduced into evidence. Notwithstanding the erroneous admission of that evidence, a verdict will not be reversed if the reviewing court, assuming that the damaging potential of the improperly admitted evidence is fully realized, determines that the error was harmless beyond a reasonable doubt. Delaware v. Van Arsdall, 475 U.S. 673, 106 S. Ct. 1431, 89 L. Ed. 2d 674 (1986); State v. Wille, 559 So.2d at 1332. "Reversal is mandated only when there is a reasonable possibility that the evidence might have 897 contributed to the verdict." Id. (citing Chapman v. California, supra). Factors to be considered include the importance of the evidence to the State's case, the presence or absence of additional corroboration of the evidence, and the overall strength of the State's case. Id. In this case, Officer Marroccoli, Detectives Cunningham and Crowden, Miss Robinson and Leroy Edwards all testified at trial and underwent thorough cross-examination. Other witnesses and the evidence corroborated their trial testimony. Considering the strength of the State's case owing to Miss Robinson's identification of Dangerfield and Lorenzo as her assailants, it is highly unlikely Dangerfield was convicted on the strength of "hearsay" evidence. This assignment of error is without merit. DANGERFIELD'S ASSIGNMENT OF ERROR NO. 4 In his fourth assignment of error, Dangerfield contends that the district court erred in failing to grant his challenge for cause. The defense issued the challenge against Ms. Reed serving as a juror because she stated that her religious beliefs precluded her from sitting in judgment of others. In deciding whether to grant a challenge for cause, the district court must evaluate the juror's responses during the entire voir dire examination. State v. Bourque, 622 So. 2d 198, 227 (La.1993). A denial of a challenge for cause based on impartiality is not an abuse of discretion where, after further inquiry and instruction, the potential juror has demonstrated a willingness and ability to decide the case impartially and according to the law and evidence. State v. Copeland, 419 So. 2d 899 (La.1982). A trial court has great discretion in matters of a juror's fitness to serve, and its rulings on challenges for cause will not be disturbed unless the record of voir dire as a whole reveals an abuse of that discretion. State v. Roy, 95-0638 (La.10/4/96), 681 So. 2d 1230, 1234. Even assuming that the district court did abuse its discretion, Dangerfield must show prejudice as a result of the district court's error. Prejudice is presumed when a challenge for cause is erroneously denied and all of the defendant's peremptory challenges are exhausted. One need only show that the trial court erroneously denied a challenge for cause. No additional showing of prejudice is required. State v. Robertson, 92-2660 (La.1/14/94), 630 So. 2d 1278, 1280; State v. Richardson, 97-1995 (La.App. 4 Cir. 3/3/99), 729 So. 2d 114. However, under La.C.Cr.P. art. 800, a defendant may complain of a ruling refusing to sustain his challenge for cause even if he had not thereafter exercised all of his peremptory challenges. La.C.Cr.P. art. 800 states that: A defendant may not assign as error a ruling refusing to sustain a challenge for cause made by him, unless an objection thereto is made at the time of the ruling. The nature of the objection and grounds therefore shall be stated at the time of objection. The erroneous allowance to the state of a challenge for cause does not afford the defendant a ground for complaint, unless the effect of such ruling is the exercise by the state of more peremptory challenges than it is entitled to by law. Thus, there is no specific allowance or prohibition for assigning as error the improper denial of a challenge for cause when the defendant has not used all of his peremptory challenges. Richardson, 729 So.2d at 119. 898 In this case, the record reflects that Dangerfield did not exhaust all of his peremptory challenges prior to impaneling the jury. In State v. Robertson, 630 So.2d at 1280, the Louisiana Supreme Court clearly stated: Whereas before 1983, a defendant who had been erroneously denied a valid challenge for cause could not even complain about the error on appeal unless he had exercised all his peremptory challenges, under the new version of Article 800, a defendant is now permitted to complain of a ruling refusing to sustain his challenge for cause even if he had not thereafter exercised all of his peremptory challenges. State v. Vanderpool, 493 So. 2d 574, 575 (La.1986). See also State v. Copeland, 530 So. 2d 526, 535 (La.1988). In such a case, the defendant must be able to show some prejudice in order to overcome the requirement of La.C.Cr.P. art. 921 that "[a] judgment or ruling shall not be reversed by an appellate court because of any error ... which does not affect substantial rights of the accused." Inasmuch as Dangerfield has not shown that he used all of his peremptory challenges prior to completing the jury panel, he cannot argue that the district court's ruling forced him to accept Ms. Reed as a juror. Moreover, he has not shown any resultant prejudice from the denial of his challenge for cause. This assignment of error has no merit. DANGERFIELD'S ASSIGNMENT OF ERROR NO. 5 and TAYLOR'S ASSIGNMENT OF ERROR NO. 1 In this assignment of error, both Dangerfield and Taylor argue that the evidence is insufficient to support their convictions. Taylor claims that Miss Robinson's testimony concerning her abductors' identities was so conflicted that it lacked credibility. Dangerfield argues that the identifications made by Miss Robinson were unreliable in that her ability to see her kidnappers was obscured and, further, that the identifications were made weeks after the incident. Under Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979), the proper standard of appellate review for a sufficiency of evidence claim is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond a reasonable doubt. State v. Rosiere, 488 So. 2d 965 (La.1986). In this case, Dangerfield and Taylor object to minor inconsistencies in Miss Robinson's testimony concerning the height and weight of her kidnappers and the length of time between the incident and her identification of the kidnappers. In Manson v. Brathwaite, 432 U.S. 98, 97 S. Ct. 2243, 53 L. Ed. 2d 140 (1977), the United States Supreme Court set forth a five-factor test to determine whether an identification is reliable: (1) the opportunity of the witness to view the assailant at the time of the crime; (2) the witness' degree of attention; (3) the accuracy of the witness' prior description of the assailant; (4) the level of certainty demonstrated by the witness; and (5) the length of time between the crime and the confrontation. State v. Washington, XXXX-XXXX (La.App. 4 Cir. 7/18/01), 793 So. 2d 376. A trial court's determination on the admissibility of identification evidence is entitled to great weight and will not be disturbed on appeal in the absence of an abuse of discretion. State v. Bickham, 404 So. 2d 929 (La.1981). Miss Robinson did not contradict herself as to the events which took place on the night of February 14, 1999, and the role 899 Dangerfield and Taylor played in those events. She was able to describe those events in detail to the police immediately after the crime. Her identification was based on her clear view of her captors while her attention was focused upon their unmasked faces for fifteen minutes as they ransacked her house looking for money. Miss Robinson testified at trial that even after she was blindfolded, she was able to see what was going on around her and that she recognized Dangerfield from high school. She was certain of her identification at the photographic line-ups and in court. The district court and the jury believed that Miss Robinson identified her captors and the physical evidence corroborated her testimony. This assignment of error is meritless. DANGERFIELD'S ASSIGNMENT OF ERROR NO. 6 In his final assignment of error, Dangerfield argues that the district court erred in denying his motion for new trial on the basis of insufficient evidence. As the issue of the sufficiency of the evidence was determined in the previous assignment of error, this assignment of error is without merit. TAYLOR'S ASSIGNMENT OF ERROR NO. 2 In his final assignment of error, Taylor argues that the district court erred in allowing hearsay testimony concerning a tip from a confidential informant. The record does not indicate that Taylor's defense counsel lodged a contemporaneous objection to the admission of the alleged hearsay testimony at trial. Hence, the issue has not been preserved for appellate review. La.C.Cr.P. art. 841; State v. Johnson, XXXX-XXXX (La.App. 4 Cir. 2/14/01), 780 So. 2d 1140. Taylor argues in the alternative that if this assignment of error has not been preserved on appeal because of counsel's failure to object, then Taylor received ineffective assistance of counsel. Generally, the issue of ineffective assistance of counsel is a matter more properly addressed in an application for post conviction relief, filed in the trial court where a full evidentiary hearing can be conducted. State v. Prudholm, 446 So. 2d 729 (La.1984); State v. Reed, 483 So. 2d 1278 (La.App. 4 Cir.1986). Only if the record discloses sufficient evidence to rule on the merits of the claim do the interests of judicial economy justify consideration of the issues on appeal. State v. Ratcliff, 416 So. 2d 528 (La.1982); State v. Garland, 482 So. 2d 133 (La.App. 4 Cir. 1986). Under Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984), a defendant must show that his counsel's performance was deficient and that the deficient performance prejudiced him. With regard to counsel's performance, the defendant must show that counsel made errors so serious that counsel was not functioning as "counsel" guaranteed by the Sixth Amendment. As to prejudice, the defendant must show that counsel's errors were so serious as to deprive the defendant of a fair trial, i.e., a trial whose result is reliable. Id., 466 U.S. at 687, 104 S. Ct. at 2064. Both showings must be made before it can be found that the defendant's conviction resulted from a breakdown in the adversarial process that rendered the trial result unreliable. Id. A claim of ineffective assistance may be disposed of on the finding that either of the Strickland prongs has not been met. State v. James, 555 So. 2d 519 (La.App. 4 Cir.1989). If the claim fails to establish either prong, the reviewing court need not address the other. State ex rel. State v. Marino, XXXX-XXXX (La.App. 4 Cir. 6/27/01), 804 So. 2d 47, citing Murray v. Maggio, 736 F.2d 279 (5th Cir.1984). *900 Dangerfield argues the district court erred in allowing Detective Cunningham to testify as to the substance of his conversation with the confidential informant. While cross-examining Detective Cunningham, Dangerfield's counsel asked how the detective developed Dangerfield as a suspect in the shooting. Detective Cunningham responded: ... I went to the neighborhood [in which the shooting occurred] on two occasions. I spoke to people that was [sic] standing on the corner, I left my business card with my beeper number ... I talked to [the people standing on the corner] they had said that they had heard that the persons that shot the pregnant female had lived in the area and I left my business card and I said that if anybody got any additional information they can contact me and they can remain confidential. Then I received a phone call from a subject ... they gave me the name Lorenzo Taylor and Kendrick Dangerfield. Taylor claims that the detective's testimony circumvented the hearsay rule and deprived Taylor of the right to confront and cross-examine the absent informant/ accuser. One of the primary justifications for the exclusion of hearsay is that the adversary has no opportunity to cross-examine the absent declarant to test the accuracy and completeness of the testimony. The declarant is also not under oath at the time of the statement. Moreover, the confrontation clause of the United States Constitution provides that "[i]n all criminal prosecutions, the accused shall enjoy the right... to be confronted with the witnesses against him." U.S. Const. Amend. VI. The relationship between the confrontation clause and hearsay evidence was discussed in California v. Green, 399 U.S. 149, 90 S. Ct. 1930, 26 L. Ed. 2d 489 (1970). In this case, Detective Cunningham's testimony is impermissible hearsay, and its admission erroneous. Nevertheless, in State v. Wille, supra, citing Chapman v. California, supra, the Louisiana Supreme Court stated that confrontation errors were subject to a harmless error analysis; i.e., the erroneous admission of hearsay evidence mandates reversal of a conviction only when there is a reasonable possibility that the evidence might have contributed to the verdict. Id. The court further stated that the factors to be considered in determining if the error was harmless beyond a reasonable doubt include the following: (1) the importance of the witness' testimony in the prosecution's case; (2) the presence or absence of evidence corroborating or contradicting the witness' testimony on material points; (3) the extent of cross-examination permitted; and (4) the overall strength of the prosecution's case. Id. At trial of this matter, Detective Cunningham was subjected to extensive and artful cross-examination. Other witnesses corroborated the salient facts of the case elicited during his direct testimony. Considering that the foundation of the State's case against Taylor was Miss Robinson's identification of him as one of the perpetrators, not information received from confidential sources, it does not appear that hearsay testimony contributed to the guilty verdict, and thus did not amount to ineffective assistance of counsel. Accordingly, there is no merit in this assignment of error. DECREE For the reasons stated, the conviction and sentences of both Kendrick Dangerfield and Lorenzo Taylor are affirmed. AFFIRMED NOTES [1] Lorenzo Taylor's sentence on count 2 of the indictment is incorrectly reported in the minute and docket entries as a twenty-five year sentence.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1939552/	334 B.R. 207 (2005) In re Alcydee CHARLES, Debtor. No. 05-95071. United States Bankruptcy Court, S.D. Texas, Houston Division. November 30, 2005. 208 209 210 211 212 213 Russell C. Simon, Simon and Associates, Houston, TX, for Debtor. H. Gray Burks, IV, Houston, TX, for Trustee. MEMORANDUM OPINION MARVIN ISGUR, Bankruptcy Judge. On November 18, 2005, the Court conducted a hearing on Debtor's Amended Emergency Motion for Continuation of the Automatic Stay [docket no. 10]. Debtor's motion requests this Court enter an Order continuing the automatic stay as to all creditors pursuant to 11 U.S.C. § 362(c)(3)(B). For the reasons stated below, the Court extends the stay as to all creditors. Background Alcydee Charles filed this bankruptcy case on October 31, 2005. Prior to filing this case, Ms. Charles was a debtor in a previous chapter 13 case that was voluntarily dismissed on July 6, 2005. Ms. Charles voluntarily dismissed her previous case after she was requested to do so by her largest secured creditor, Citifinancial Mortgage Company ("Citifinancial"). Citifinancial is the holder of a note, secured by a deed of trust against Ms. Charles' homestead. Ms. Charles dismissed her previous case in order for negotiations to proceed with Citifinancial concerning her ability to restructure the note. The principal issue in the restructuring concerned an advance made by Citifinancial to pay property taxes owed on Ms. Charles' homestead. Ms. Charles' adult daughter, Carla Charles, has been in control of her mother's finances for six to seven years. Both Alcydee and Carla Charles incorrectly believed that the monthly mortgage payments to Citifinancial included a sufficient escrow amount for property taxes. The negotiations outside bankruptcy failed and Ms. Charles filed the present case after her homestead was again posted for foreclosure. On October 17, 2005, most of the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 became effective. The Act dramatically modifies the automatic stay provisions under § 362 of the Bankruptcy Code. One significant change affects individuals who have been in a previous bankruptcy case "pending within the preceding 1-year period...." 11 U.S.C. § 362(c)(3). Section 362(c)(3)(A) provides that the automatic stay shall terminate on the 30th day after the filing of a case if the debtor has had a case pending within the preceding one-year period. Section 362(c)(3)(B) provides for the possibility of continuing the stay beyond the original 30-day period if four requirements are met: (1) a motion is filed; (2) there is notice and a hearing; (3) the notice and hearing are completed before the expiration of the original 30-day stay; and (4) the debtor proves that the filing of the new case "is in good faith as to the creditors to be stayed." 11 U.S.C. § 362(c)(3)(B); In re Charles, 332 B.R. 538, 541 (Bankr.S.D.Tex.2005). If these requirements are met, a court may extend the stay "subject to such conditions or limitations as the court may then impose." 11 U.S.C. § 362(c)(3)(B). Ms. Charles filed her original motion to extend the automatic stay on October 31, 2005. The original motion set forth a colorable basis for an extension of the automatic 214 stay only against Citifinancial, but sought an extension as to all creditors. On November 1, 2005, the Court set a hearing date for the motion with respect to Citifinancial, denied the requested relief as to all other creditors, and granted Ms. Charles leave to file an amended motion setting forth a basis for an extension against all creditors. Ms. Charles filed an amended emergency motion for continuation of the stay on November 2, 2005. Adequate notice of the motion was given to the creditors listed on Ms. Charles' schedules on the same day. On November 18, 2005, the Court held a hearing on this matter. Accordingly, the Court has the discretion to extend the stay if Ms. Charles proves that the filing of this case is in good faith as to the creditors to be stayed. Burden of Proof Before the Court analyzes the applicable factors for determining whether the case was filed in good faith as to the creditors to be stayed, the Court must determine the nature of the burden of proof on the debtor. For the reasons set forth in detail below, the Court finds that the burden of proof on a motion to extend the automatic stay is allocated as follows: ---------------------------------------------------------------------------------------------------------- Issue Evidentiary Standard Party with Burden ---------------------------------------------------------------------------------------------------------- 1. Whether a rebuttable Preponderance As to whether more than one presumption arises under previous case was pending § 362(c)(3)(C) that the case within the one-year period was not filed in good faith as preceding the current case, to the creditor to be stayed. the burden is on the opponent of an extension of the automatic stay. --------------------------------------- As to whether a prior case was dismissed for one of the reasons set forth in § 363(c)(3)(C)(i)(II), the burden is on the opponent of the extension of the automatic stay. --------------------------------------- As to whether there has been a change in circumstances or other reason to believe that the new case will result in a discharge, the burden of proof is on the debtor.[1] --------------------------------------- 215 ----------------------------------------------------------------------------------------------------------- As to a particular creditor that had filed a § 362(d) motion in a prior case that remained pending or that had resulted in an order terminating, conditioning or limiting the automatic stay as to that creditor, the burden of proof is on the opponent of the extension of the automatic stay. ---------------------------------------------------------------------------------------------------------- 2. If a rebuttable pre-sumption Clear and convincing Debtor arises, whether the case was filed in good faith as to the creditors to be stayed. ---------------------------------------------------------------------------------------------------------- 3. If a rebuttable Preponderence Debtor pre-sumption does not arise, whether the case was filed in good faith as to the creditors to be stayed. ---------------------------------------------------------------------------------------------------------- 4. Whether the Court Preponderance Debtor should exercise its discretion to extend the automatic stay. ---------------------------------------------------------------------------------------------------------- The plain language of § 362(c)(3)(B) instructs that the automatic stay may be extended when the movant "demonstrates that the filing of the later case is in good faith as to the creditors to be stayed." Accordingly, Ms. Charles bears the burden of proving that this case is filed in good faith as to the creditors to be stayed. However, before addressing whether this new case has been filed in good faith as to Ms. Charles' creditors, the Court must first determine whether the statute imposes a rebuttable presumption against Ms. Charles. If the Court finds that her case is presumptively filed in bad faith, her burden becomes more onerous. A case is presumed to not be filed in good faith if: (i) the debtor had more than one previous case pending during the previous year; (ii) a case pending within the previous year was dismissed for failure to file certain required documents, provide adequate protection, or perform under a confirmed plan; or (iii) there has not been a substantial change in the financial or personal affairs of the debtor since the most recent case was dismissed or there is no other reason to determine that the new case will result in a discharge. 11 U.S.C. § 362(c)(3)(C)(i). A case is further presumed to not be filed in good faith as to any creditor that sought relief from the stay in a previous case if upon dismissal of the previous case the stay relief motion was still pending or the action had been resolved by terminating, conditioning, or limiting the stay as to the actions of the 216 creditor. § 362(c)(3)(C)(ii). Under § 362(c)(3)(B), a debtor may only rebut the presumption that a case is not filed in good faith "by clear and convincing evidence to the contrary." 11 U.S.C. § 362(c)(3)(B). The clear and convincing standard only arises if there is a presumption (based on one of the foregoing factors) that the case was not filed in good faith. The statute does not address what standard of proof applies in determining whether one of the presumption factors exists and the statute does not address which party has the burden of proof with respect to the presumption factors. Absent a statute or rule to the contrary, the burden of proof in a bankruptcy case is by a preponderance of the evidence. See, e.g., In re Keaty, 397 F.3d 264, 270 (5th Cir.2005) (burden of proving nondischargeability by preponderance of evidence); In re Briscoe Enters., Ltd., II, 994 F.2d 1160, 1165 (5th Cir.1993) (debtor must prove plan's feasibility and fairness by preponderance of evidence for cramdown provisions to apply). Inasmuch as the statute does not dictate an alternate standard, the Court requires proof by a preponderance of the evidence to determine if the presumption against Ms. Charles arises. The first factor that can lead to a presumption that a case is not filed in good faith is if the individual was a debtor in more than one case under chapter 7, 11, or 13 pending within the preceding one-year period. § 362(c)(3)(C)(i)(I). Because the statute requires an affirmative determination that prior cases were pending, the burden of proof on this matter rests on a party opposing the extension of the automatic stay. The second factor that can lead to a presumption that a case was not filed in good faith is if a prior case was dismissed within the preceding year after the debtor failed to file or amend required documents without substantial excuse, failed to provide adequate protection as ordered by the court, or failed to perform the terms of a confirmed plan. § 362(c)(3)(C)(i)(II). Because the statute requires an affirmative determination that the debtor has engaged in specified conduct, the burden of proof initially rests on the party alleging such conduct.[2] The third factor that can lead to a presumption that a case was not filed in good faith is if "there has not been a substantial change in the financial or personal affairs of the debtor. . . . or any other reason to conclude that the latter case will be concluded" with a chapter 7 discharge or a confirmed, fully performed chapter 11 or 13 plan. § 362(c)(3)(C)(i)(III). This subsection contains the negative term "there has not been." That clause requires proof that a substantial change has occurred. Under traditional burden of proof rules, the burden with respect to a matter concerning facts that are peculiarly within the knowledge of one party will rest on that party. Campbell v. U.S., 365 U.S. 85, 96, 81 S. Ct. 421, 5 L. Ed. 2d 428 (1961). "Burden-shifting where one party has superior access to evidence on a particular issue is a common feature of our law." In re One Parcel of Prop. Located at 194 Quaker Farms Rd., Oxford, Conn., 85 F.3d 985, 990 (2d Cir. 217 1996) (citing John W. Strong et al., McCormick on Evidence § 337, at 570 (94th ed.1992)). A debtor is in the unique position of best knowing her own changes in circumstances. Accordingly, the Court places the burden of proof by a preponderance of the evidence on the debtor. The fourth factor that can lead to a presumption that a case was not filed in good faith is applied to any creditor that filed a § 362(d) motion in a prior case filed by the debtor. If the § 362(d) motion remained pending as of the date of dismissal or if the motion resulted in an order terminating, conditioning or limiting the automatic stay as to that creditor, the presumption arises. Because the statute requires an affirmative determination with respect to the § 362(d) motion, the burden of proof on this matter rests on a party opposing the extension of the automatic stay. Presumption Does Not Arise Ms. Charles has only had one prior case pending in the past year. This prior case was not dismissed for any of the reasons set forth in § 362(c)(3)(C)(i)(II). Instead, Ms. Charles voluntarily dismissed her prior case. Further, there has been a substantial change in Ms. Charles' financial affairs. Ms. Charles' daughter has recently committed substantial additional funds to Ms. Charles by giving the chapter 13 trustee access to her checking account into which her payroll checks are directly deposited. No creditor filed a motion under § 362(d) in the previous case. Because none of the conditions of § 363(c)(3)(C) are satisfied, Ms. Charles need not overcome an evidentiary presumption that her case was not filed in good faith. Accordingly, the Court finds that Ms. Charles must prove good faith by a preponderance of the evidence. Good Faith Analysis Good faith is not defined in the Bankruptcy Code. Courts, however, have utilized a "totality of the circumstances" test to determine whether a plan has been proposed in good faith pursuant to § 1325(a)(3). See In re Chaffin, 816 F.2d 1070, 1073 (5th Cir.1987). The test "exacts an examination of all the facts in order to determine the bona fides of the debtor." Id. at 1074. Factors to be considered include whether the debtor truly intends to effectuate rehabilitation and whether the plan evidences an attempt to abuse the spirit of the Bankruptcy Code. In re Ramirez, 204 F.3d 595, 600-01 (5th Cir.2000); In re Chaffin, 816 F.2d at 1073. Other courts have considered similar factors when evaluating a debtor's good faith in proposing a chapter 13 plan. See, e.g., In re Vasquez, 261 B.R. 654, 658 (Bankr.N.D.Tex.2001); Educ. Assistance Corp. v. Zellner, 827 F.2d 1222, 1227 (8th Cir.1987).[3] No one factor is determinative. Instead, under this test, a court should consider how the factors operate together in order to determine the existence of good 218 faith. See, e.g., In re McLaughlin, 217 B.R. 772, 775-76 (Bankr.W.D.Tex.1998). Although there is no express statutory requirement that a chapter 13 petition be filed in good faith, courts have adopted similar standards for the purpose of determining whether a chapter 13 case should be dismissed or converted to a case under chapter 7 pursuant to § 1307(c). See, e.g., In re Lancaster, 280 B.R. 468, 474 (Bankr.W.D.Mo.2002) (difference between good faith in filing a chapter 13 petition and good faith in proposing a chapter 13 plan is nominal and evidence of each may be considered together).[4] Good faith may be determined on both an objective basis and on a subjective basis. In re Coleman, 426 F.3d 719, 728 (4th Cir.2005) (holding that dismissal of a chapter 11 petition required a showing of both objective and subjective bad faith, with objective bad faith being determined by the futility of the bankruptcy reorganization or liquidation process). For the purposes of objective good faith under § 362(c)(3), the Court analyzes whether this case is likely to result in a discharge. For the purposes of subjective good faith, the Court employs the "totality of the circumstances" test in analyzing the debtor's motives and her relationship with her creditors. In cases addressing a debtor's good faith in filing a petition or plan, the subjective analysis is generally performed only upon a determination that the debtor first establishes objective good faith. See In re Elmwood Dev. Co., 964 F.2d 508, 512 (5th Cir.1992).[5] Accordingly, the Court is compelled to conclude that a subjective analysis must be undertaken under § 362(c)(3)(C) only if the debtor first establishes objective good faith. This threshold test is adopted for several reasons. First, the Court has difficulty conceiving of a case that could be filed in good faith without a reasonable probability of success. Put simply, it cannot be good faith to attempt to stay a creditor from proceeding if the debtor does not have a meaningful chance of success in the bankruptcy case. Second, the Court is influenced by the language contained in § 362(c)(3)(C)(i)(III)(aa)-(bb), which requires an analysis of the likelihood of success on the merits of the new case. Third, § 362(c)(3) and (c)(4) were apparently adopted to address a problem that posed significant concern under the prior version of the Bankruptcy Code. The Court has 219 witnessed numerous debtors who have filed a series of unsuccessful cases solely for the purpose of hindering and delaying their creditors. Contrary to its intended purpose, the automatic stay was being utilized as a sword rather than as a shield. By adopting § 362(c)(3) and § 362(c)(4), Congress appears to have chosen to limit the stay in repeat cases to those with a meaningful chance of success. In this Court's view, objective good faith requires that a debtor have a meaningful chance of success in the newly filed case. In reviewing the Bankruptcy Code as a whole, Congress intended to give eligible debtors the opportunity to restructure their debts in a chapter 11 or chapter 13 case, and to discharge debts in accordance with § 1141 or § 1328. Alternatively, individuals are eligible to liquidate their assets in a chapter 7 case, and may obtain a § 727 discharge. But, if the newly filed case is futile or if the debtor is filing merely to benefit from the "stay and delay," the Court must recognize this at the earliest possible time. In adopting § 362(c)(3), Congress intended the Court to conduct an early triage of a case to determine if the case has a reasonable likelihood of success. In re Charles, 332 B.R. at 542. Indeed, this triage appears to be the analysis contemplated by § 362(c)(3)(C)(i)(III). Absent exceptional circumstances, a debtor fails to sustain her burden of demonstrating good faith as to the creditors to be stayed if the case lacks a reasonable likelihood of success. However, upon a showing that the new case has a reasonable probability of success, the Court continues the analysis and considers the totality of the circumstances in determining whether subjective good faith exists under § 362(c)(3). In reviewing the totality of the circumstances, the Court considers (i) the nature of the debts; (ii) the nature of any collateral; (iii) eve of bankruptcy purchases; (iv) the debtor's conduct in the present case; (v) reasons why the debtor wishes to extend the stay; and (vi) any other circumstances that weigh on the wisdom of an extension. Nonetheless, because the focus of § 362(c)(3) is on a debtor's good faith "as to the creditors to be stayed," the Court holds that a new case is conclusively filed in good faith as to a creditor that so stipulates. If a creditor to be stayed stipulates that the case is filed in good faith as to that creditor, the Court's inquiry necessarily concludes without consideration of objective or subjective good faith and the automatic stay is extended. In summary, there are no published opinions analyzing the good faith requirement in § 362(c)(3). The Court therefore adopts the test set forth in the below chart to determine whether the new case was filed in good faith as to a creditor: ------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- Issue Result ------------------------------------------------------------------------------------------------- 1. Whether the creditor to be stayed agrees If so, the inquiry ends and the Court extends that the new case was filed in good faith with the stay. If not, the Court must proceed to respect to that creditor. the next inquiry. ------------------------------------------------------------------------------------------------- 2. Whether the new case is likely to result If not, the inquiry ends absent exceptional in a bankruptcy discharge (i.e., the objective circumstances. If so, the Court must proceed test). to the next inquiry. 220 ------------------------------------------------------------------------------------------------- 3. Whether other factors show that the case The listed subfactors should be considered on was filed in good faith with respect to the the totality of the circumstances. No one creditor to be stayed (i.e., the subjective factor should be determinative. test). ------------------------------------------- A. Nature of the debt. ------------------------------------------- B. Nature of the collateral. ------------------------------------------- C. Eve of bankruptcy purchases. ------------------------------------------- D. Debtor's conduct in the present case. ------------------------------------------- E. Reasons why the debtor wishes to extend the stay. ------------------------------------------- F. Other circumstances that weigh on the wisdom of the extension. ------------------------------------------------------------------------------------------------- 1. The position taken by creditors against whom an extension of the stay is sought. In this case, Citifinancial agreed that this case was filed in good faith as to Citifinancial. Ms. Charles' previous case was voluntarily dismissed at Citifinancial's request. Citifinancial had informed Ms. Charles that its loss mitigation department would not negotiate with her during the pendency of her prior case. Although the out-of-court negotiations ultimately proved unsuccessful, Citifinancial acknowledged that Ms. Charles was proceeding in good faith. Accordingly, the Court extends the automatic stay as to Citifinancial based on its stipulation. Ms. Charles' motion seeks to extend the stay as to all creditors. No other creditor took a position as to whether this case was filed in good faith as to that creditor. Accordingly, when a creditor has not stipulated that the case was filed in good faith as to that creditor, the Court must independently consider good faith as to that creditor. See 11 U.S.C. § 362(c)(3)(B). 2. The likelihood that the new case will result in a bankruptcy discharge. This issue considers the objective good faith analysis. If a case is filed after a previous case has been pending during the preceding year, the Court must consider whether the new case is likely to be successful.[6] If the newly-filed case is likely to result in another dismissal (whether voluntary or involuntary), then the newly filed case is likely not filed in good faith as to any non-consenting creditor. In this case, the Court finds that there is a reasonable likelihood that this case will result in a chapter 13 discharge. To obtain a chapter 13 discharge, a debtor must obtain a confirmed chapter 13 plan and must perform under that plan. 11 U.S.C. § 1328(a).[7] On a preliminary basis, Ms. Charles' proposed plan appears to satisfy all confirmation requirements of § 1325. Among these is a requirement that the debtor will be able to make all payments under the plan and comply with the plan. 11 U.S.C. § 1325(a)(6). 221 At the time of the hearing on this matter, Ms. Charles had already filed her proposed chapter 13 plan.[8] The plan provides that Ms. Charles make 60 monthly payments of $1,215. On Schedule I, Ms. Charles lists her total monthly income as $3,216. Ms. Charles' income consists of monthly social security receipts in the amount of $1,071 and a monthly contribution from her daughter in the amount of $2,145. Ms. Charles' daughter holds two nursing jobs. The Court heard extensive evidence concerning the income earned by Ms. Charles' daughter from these two jobs, each of which she has held for more than four years. The daughter's paychecks are directly deposited into a joint account with Ms. Charles, as are Ms. Charles' monthly social security checks. The Court also heard extensive evidence with respect to Ms. Charles' monthly expenses. Ms. Charles' daughter testified that she lives with her mother and that her housing expenses are included in those listed on Ms. Charles' schedules. The daughter further testified that she has no personal debt for real property or vehicles. Ms. Charles has arranged to have the chapter 13 trustee automatically debit her joint account each month for the amount of the proposed payment to the chapter 13 trustee. It is this Court's experience that a chapter 13 plan is substantially more likely to succeed with an automatic debit from a bank account or a wage order. Based on the evidence, the Court concludes that Ms. Charles' plan is likely to be confirmed, that she is likely to perform under the plan, and that she is likely to obtain her chapter 13 discharge. Accordingly, Ms. Charles has met her threshold burden as to good faith. Nonetheless, the Court must continue the analysis to ensure that the case is filed in good faith as to the creditors to be stayed. 11 U.S.C. § 362(c)(B). 3. Non-exclusive list of factors relevant to the determination of whether good faith exists. Once the Court makes a threshold determination that the debtor is likely to obtain a discharge, the Court moves on to a subjective good faith analysis, considering the following factors: A. The nature of the debt held by the creditor. Because the evaluation of good faith in the statute requires the Court to determine whether the case was filed in good faith "as to the creditors to be stayed," the Court must consider the nature of the debt. If the debt was incurred for reasonable and necessary living expenses, the Court is more likely to find that the debtor's relationship with the creditor (and thus the filing of the case) is characterized by good faith. If the debt arises from questionable conduct by the debtor, the Court is less likely to characterize the debtor's relationship with the creditor (and thus the filing of the case) as one of good faith. Each situation may be unique. Debts may arise from fraud, violence, or the purchase of luxury goods and services. In each instance, the Court will be required to weigh the relationship between a particular debt to the filing of the bankruptcy case in reaching its overall determination. In this case, all of Ms. Charles' debts appear to arise out of the purchase of the necessities of life. This factor weighs in favor of a good faith finding. 222 B. The nature of the collateral held by the creditor. If the creditor is secured by the debtor's homestead, by a sole source of transportation or by other necessities, the Court is more likely to find that the debtor's actions are in good faith. As with the evaluations set forth above, there will be a continuum. The Court is more likely to find that a debtor acts in good faith to forestall the foreclosure of a home or the repossession of a sole source of transportation but less likely to find that a debtor acts in good faith to re-file a case to forestall the repossession of a luxury item such as a pleasure boat or a vacation timeshare. In this case, the sole secured debt is the debtor's home. This factor weighs in favor of a good faith finding. C. Eve of bankruptcy purchases. It is settled law that a debtor's good faith should be questioned if the debtor makes purchases in contemplation of a bankruptcy case. See, e.g., In re Vianese, 192 B.R. 61, 72 (Bankr.N.D.N.Y.1996); In re Barnes, 158 B.R. 105, 108-09 (Bankr.W.D.Tenn.1993). Accordingly, the Court will examine the date on which debts were incurred in evaluating whether the plan was filed in good faith with respect to those creditors with recent claims. In this case, there is no evidence of recent purchases by Ms. Charles. This weighs in favor of a good faith finding. D. The debtor's conduct in the present case. The Court should examine the debtor's conduct to see if the present case is filed in a bona fide effort to obtain a discharge. Important inquiries include whether the debtor attended required meetings with the trustee, filed her schedules and statements, and otherwise performed her duties under the Bankruptcy Code and Rules. In this case, Ms. Charles promptly filed her plan, sought to make her payments with an automated clearinghouse deduction from her bank account, and timely filed her schedules and statements. The Court finds that her conduct weighs in favor of a good faith finding. E. The reasons why the debtor wishes to extend the automatic stay. The Court should determine the true purpose of the stay extension. If the purpose is to extend the stay to avoid the loss of an essential asset (such as a home or a sole source of transportation), then the purpose weighs in favor of an extension of the automatic stay. If the purpose is to delay or harass a creditor, it weighs against the extension of the automatic stay. The essential purpose of the new case cannot be to impose the automatic stay in order to delay a foreclosure, a lawsuit, or other collection activity. Such "stay and delay" tactics do not constitute good faith as to the creditors who are delayed. In this case, Ms. Charles seeks to extend the automatic stay to avoid the diversion of her attention and resources to her unsecured creditors. She alleges that such a diversion would interfere with her ability to focus her resources on saving her home. The Court does not find this reasoning to be persuasive. In every case, debtors would prefer an extension of the stay as to all creditors. Prior to the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the filing of a chapter 13 bankruptcy petition resulted in a stay against property of the estate that remained in effect until the property was no longer property of the estate. The fact that Congress amended § 362 to provide that the stay automatically terminates with respect to debts or 223 property in certain cases evinces Congressional intent that the stay no longer apply in whole or in part to every debtor seeking the protections of the Bankruptcy Code. Instead, Congress intended that repeat debtors support a request for an extension of the stay as to each creditor with evidence of circumstances justifying the extension. No special circumstances are shown in this case. Accordingly, the Court finds that this factor does not support extending the stay in Ms. Charles' case. F. Any unique circumstances. Finally, the Court should consider any facts or circumstances peculiar to a case. In this case, the Court finds that the reason for the dismissal of Ms. Charles' first case to allow negotiations with her home lender should be considered as a factor in determining the good faith of this case. This case is a natural by-product of the failed negotiations following the first case. Her actions in the two cases combined show that she is approaching her insolvency in good faith as to all of her creditors. Accordingly, this factor weighs in favor of an extension of the stay. The Court does not merely count the factors weighing in favor of and against a subjective good faith finding. Rather, the Court considers the factors based on the "totality of the circumstances." Based on the foregoing evaluation of Ms. Charles' subjective good faith, the Court finds that this case was filed with subjective good faith. Equitable Factors Although a debtor's good faith may authorize the extension of the stay, the statute does not mandate that the Court grant relief upon such a showing. 11 U.S.C. § 362(c)(3)(B). Instead, the statute provides that "the court may extend the stay in particular cases as to any or all creditors" once the requirements of § 362(c)(3)(B) are satisfied. Id. (emphasis added). The discretion arises from the statute's use of the word "may" rather than "shall" when setting forth whether the relief should be granted. Jama v. Immigration and Customs Enforcement, 543 U.S. 335, 125 S. Ct. 694, 703, 160 L. Ed. 2d 708 (2005). As set forth in Jama, "may" customarily connotes discretion. See, e.g., Haig v. Agee, 453 U.S. 280, 294, n. 26, 101 S. Ct. 2766, 69 L. Ed. 2d 640 (1981). Consequently, a movant must demonstrate sufficient equitable factors to justify the court's exercise of its discretion. In re Charles, 332 B.R. at 542-43. In the present case, Ms. Charles filed her motion in good faith seeking an extension of the stay to prevent a scheduled foreclosure on her major asset her home. No objections to Ms. Charles' motion were filed. The potential benefits to Ms. Charles if the automatic stay is extended are patent. If successful, she may be able to retain her homestead, which alone raises substantial equitable considerations in the debtor's favor. In re Osborne, 379 F.3d 277, 284 (5th Cir.2004). Moreover, equitable factors require the Court to consider competing interests. In this case, no creditor opposed the extension of the automatic stay. Accordingly, the Court has no direct, corresponding equities to consider against an extension of the automatic stay. Nevertheless, the evidence before the Court indicates a substantial probability that all creditors in this case will be paid not less than they would be paid if the debtor's assets were liquidated in a chapter 7 bankruptcy case. Accordingly, the Court finds that the equities of this case favor the *224 extension of the automatic stay as to all creditors. Conclusion Ms. Charles filed this case in good faith as to all creditors in this case and the equities favor an extension of the automatic stay. Accordingly, the Court extends the automatic stay as to all creditors. NOTES [1] The Court recognizes that a party in interest other than the debtor may seek to extend the stay. In this case, the party seeking the extension is the debtor. [2] With respect to § 362(c)(3)(C)(i)(II)(aa), the statute provides that the debtor's failure to file or amend the specified documents must have been without substantial excuse in the prior case. Although the general burden would be on the non-debtor party, the burden of proof for the affirmative defense of substantial excuse rests on the debtor. F.T.C. v. Nat'l Business Consultants, Inc., 376 F.3d 317, 322 (5th Cir.2004). [3] A non-exclusive list of factors used to determine whether a debtor's plan was filed in good faith include the following: amount of proposed payments, debtor's earning capacity, types of debts sought to be discharged, frequency with which debtor has sought bankruptcy relief, motivation and sincerity of the debtor, debtor's ability to pay, circumstances giving rise to the debts, the presence or absence of objections to the proposed plan, duration of the plan, accuracy of information provided by the debtor, whether the plan is preferential to certain creditors, whether the debts would be dischargeable in chapter 7, and whether the debtor seeks unfairly to manipulate provisions of the Code. See In re Vasquez, 261 B.R. 654, 658 (Bankr.N.D.Tex.2001). [4] Factors considered in determining whether a chapter 13 petition was filed in good faith include: (1) whether there are any deficiencies or inaccuracies in the debtor's schedules or plan that might amount to an attempt to mislead the court; (2) whether payments proposed by the plan are fundamentally fair in dealing with creditors, including consideration of timing of filing, amount and proportion of debt that would not be dischargeable in a liquidation and equities of any classification; and (3) whether the debtor had any improper motivation in seeking relief, as indicated, in part, by circumstances under which debts were incurred. In re Ramji, 166 B.R. 288, 290-91 (Bankr.S.D.Tex.1993). These factors are analyzed based on the totality of the circumstances. Id. [5] In Elmwood Dev. Co., 964 F.2d 508 (5th Cir.1992), the Court dismissed the debtor's petition as not filed in good faith, and concluded that no subjective analysis was required after it first determined that the case did not meet an objective good faith standard. In Elmwood, the Fifth Circuit relied in part on an Illinois district court decision that held: [O]nce a court has properly found that the debtor has failed to satisfy the court's objective good faith inquiry . . . it may properly dismiss the debtor's petition without considering the debtor's subjective good faith. Id. at 512 n. 14 (citing In re McCormick, 127 B.R. 410, 415 (N.D.Ill.1991)). [6] This type of forward-looking scrutiny is common in other analyses. See, e.g., Sierra Club v. Espy, 38 F.3d 792, 798 (5th Cir.1994) (the moving party must establish a substantial likelihood of success on the merits in order to obtain a preliminary injunction). [7] Under certain circumstances, a debtor may obtain a limited discharge for partial performance. 11 U.S.C. § 1328(b)-(c). [8] In her schedules filed in this case, Ms. Charles lists 23 debts. Three of these debts are secured by liens against her homestead. The remaining debts are unsecured and total less than $30,000.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1638431/	675 F. Supp. 342 (1987) Thomas Lee BYRD, Freddie Funchess, Arthur Mae Hampton, Walter Bernell Scott, Printress Earl Smith, Plaintiffs, v. TRAVENOL LABORATORIES, INC., Baxter Laboratories, Inc., Baxter Travenol Laboratories, Inc., Defendants. Civ. A. No. DC 83-228-D-O. United States District Court, N.D. Mississippi, Delta Division. October 8, 1987. On Motion For Reconsideration December 15, 1987. 343 Richard T. Seymour, Lawyers' Committee for Civil Rights Under Law, Washington, D.C., Nausead Stewart, Jackson, Miss., for plaintiffs. Stephen N. Shulman, Cadwalader, Wichersham & Taft, Washington, D.C., T.H. Freeland, III, Oxford, Miss., for defendants. MEMORANDUM OPINION DAVIDSON, District Judge. This cause is presently before the court on the defendants' motion to dismiss for failure to state a claim. Having reviewed the parties' briefs and being otherwise fully advised in this matter, the court is of the opinion that the defendants' motion should be sustained in part and denied in part. I FACTUAL BACKGROUND The history of this action dates back to 1967. In this employment discrimination action, plaintiffs allege that they were discriminated against during the years 1967 through 1976. Plaintiffs seek relief pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and pursuant to 42 U.S.C. § 1981. The plaintiffs are applicants for intervention in another employment discrimination action pending before this court, Payne v. Travenol Laboratories, Inc., Civ. Act. No. 72-13-D-D. The Payne action has been underway before this court since 1972. The present action was filed allegedly to preserve plaintiffs' rights under the Notices of Right to Sue issued by the Equal Employment Opportunity Commission on June 30, 1983. If plaintiffs had not filed their own suit within the 90-day period prescribed by 42 U.S. C. § 2000e-5(f), and if intervention in the Payne action is not permitted, plaintiffs might be barred from filing a new suit. In order to rule on the present motion to dismiss, the court is of the opinion that an abbreviated review of the history of the Payne case would be helpful at this juncture. A. Brief History of Payne v. Travenol The Payne litigation in which plaintiffs seek to intervene was commenced on March 2, 1972, when Payne and two other individuals filed a class action complaint alleging race discrimination in certain of Travenol's employment practices. On November 16, 1972, this court defined a class for that action consisting of all black employees and applicants for employment at Travenol since March 3, 1970. This class certification became obsolete or meaningless on December 1, 1972 when the Payne plaintiffs sought and were granted leave (on May 1, 1973) to amend their complaint to allege sex discrimination. Thereafter, on May 8, 1973 the sole male plaintiff in Payne, Mr. James Williams, voluntarily withdrew from the case. On July 31, 1973, the court permitted an additional complaint in intervention by Delilah Cherry and Birdie Lee Griffin, alleging discrimination on the basis of both race and sex. 344 On December 20, 1974, this court in Payne determined that a conflict between the original sex discrimination claims and the interests of black males prevented the Payne plaintiffs from adequately representing the interests of the males. The court, therefore, redefined the class so that it did not include males. A two-week trial was held in March 1975 and Judge Orma Smith handed down his decision on liability in the case on February 19, 1976. In that decision Judge Smith found that the defendants had discriminated against blacks and women in various respects, including discrimination in the imposition of a 10th-grade education rerequirement. See Payne v. Travenol Laboratories, Inc., 416 F. Supp. 248 (N.D.Miss.1976). Limited injunctive relief was granted at that time as to this educational requirement and the parties' proposals for a final decree were sought. Id. at 265-266. On March 19, 1976, the defendants took an appeal to the Fifth Circuit. The scope of the appeal was limited to the partial injunction entered on February 19, 1976. The Fifth Circuit deferred ruling on the appeal until entry of a final order, so that an appeal from the final order could be consolidated with the limited appeal before the Court of Appeals. On December 8, 1976, the district court made final the definition of the class which had been conditionally entered on December 20, 1974. See Payne v. Travenol Laboratories, Inc., 74 F.R.D. 14 (N.D.Miss. 1976). In 1978, the Court of Appeals handed down its first decision on appeal of this case. The Fifth Circuit affirmed in part and reversed in part the limited injunction entered below. See Payne v. Travenol Laboratories, 565 F.2d 895 (5th Cir.1978) (Payne I), cert. denied, 439 U.S. 835, 99 S. Ct. 118, 58 L. Ed. 2d 131 (1978). The court's reversal of the injunction against the 10th-grade education requirement was made on the grounds that: (1) the named plaintiffs had all finally satisfied the requirement by the date that suit was filed; (2) any inability of plaintiff Payne to satisfy the 10th-grade education requirement before March 3, 1970 was irrelevant because the trial court's class definition had removed from consideration all applications for employment submitted prior to March 3, 1970; and (3) the class, by definition, excluded persons who had been harmed by the requirement. On August 20, 1980, the court adopted the United States Magistrate's recommendation for entry of a final decree. Both parties appealed. On April 22, 1982, the Fifth Circuit handed down its second decision on appeal. See Payne v. Travenol Laboratories, Inc., 673 F.2d 798 (5th Cir. 1982) (Payne II), cert. denied, 459 U.S. 1038, 103 S. Ct. 451, 74 L. Ed. 2d 605 (1982). The Court of Appeals upheld the exclusion of black males from the class on the ground that black females alleging claims of both race and sex discrimination had a conflict of interest with black males whose interests lay only in the claims of race discrimination. Id. at 810-811. The Court of Appeals noted that there was no black male plaintiff and thus a separate subclass of black males could not be created; the Fifth Circuit also held that the district court's decision not to give black males notice of their impending exclusion from the class was not reversible error. Id. at 811-813. The Court of Appeals also reversed the opening date restriction on class membership. The Court of Appeals held that the class on the Title VII count should extend back to October 31, 1969, and that the class on the Section 1981 count for claims of racial discrimination should extend back to March 2, 1966 if the district court found that there was racial discrimination going back to that date. Id. at 813-815. The Fifth Circuit then remanded Payne for additional proceedings before this court. B. The Byrd Plaintiffs On February 17, 1983, six black applicants, each one a plaintiff in this cause, moved for leave to intervene as additional plaintiffs in Payne. These plaintiffs sought to intervene to resolve the conflict of interest cited by the Fifth Circuit and to expand the class definition to include black males harmed by the same types of racial discrimination which had already been 345 found as to black females. The present plaintiffs were never included as plaintiffs in Payne; however, they now allege race discrimination against black males in Travenol's hiring and promotion practices and race discrimination against blacks allegedly harmed by the prior 10th-grade education requirement. The alleged discrimination reportedly occurred between 1967 and 1976. The motion to intervene is presently pending before this court and will be addressed in a separate manner at a later date. The EEOC issued Notices of Right to Sue dated June 30, 1983 to each of the applicants for intervention in Payne. To avoid the possibility of losing their right to bring suit during the pendency of their application for leave to intervene, these plaintiffs filed this action on September 29, 1983. With their complaint plaintiffs filed a Related Case Statement and a Motion to Consolidate this action with Payne. On October 21, 1983, the defendants filed the present motion to dismiss this action for failure to state a claim. By its order of October 26, 1983, the court permitted the defendants until 10 days after the court has ruled on the motion to dismiss to respond to the plaintiffs' motion to consolidate. A status conference in this cause was held in December 1986. II CONCLUSIONS OF LAW A. Plaintiffs' Title VII Claims Defendants argue that the plaintiffs have done nothing to pursue their claims for alleged discrimination since black males were excluded from the Payne litigation in 1974.[1] Accordingly, defendants contend the present action is untimely and cannot be maintained by the plaintiffs because it is barred by the applicable statutes of limitations. Plaintiffs understandably contend that this action is not time-barred. In reviewing a matter on a motion to dismiss for failure to state a claim, Fed.R. Civ.P. 12(b)(6), the court must permit the complaint to stand "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, 102, 2 L. Ed. 2d 80 (1957). This restriction is generally applicable as to the factual allegations and the substantive aspects of the plaintiffs' claim. In this cause, however, defendants argue a jurisdictional type question in alleging that the plaintiffs' action is time-barred. Defendants would have the court dismiss this action without looking closely at the merits. The court notes initially that since there was no notice given to absent class members when black males were excluded from the court's redefined class,[2] these black males were not given an opportunity to decide whether to "opt out" or to pursue their own lawsuits. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 176, 94 S. Ct. 2140, 2151, 40 L. Ed. 2d 732 (1974). The present plaintiffs were arguably included in the class of black males and females before the class was redefined by the court in December 1974. Since they were given no notice to pursue their own actions, these plaintiffs did nothing to pursue their own claims from 1974 until 1983. The court must decide whether the statute of limitations on their claims ran during that time period. In the case of Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 103 S. Ct. 2392, 76 L. Ed. 2d 628 (1983), the Supreme Court ruled that: "Once the statute of limitations has been tolled, it remains tolled for all members of the putative class until class certification is denied." Id. at 354, 103 S.Ct. at 2397-98. Similarly, the Supreme Court held in American Pipe & Construction 346 Co. v. Utah, 414 U.S. 538, 94 S. Ct. 756, 38 L. Ed. 2d 713 (1974) that "the commencement of a class action suspends the applicable statute of limitations as to all asserted class members of the class who would have been parties had the suit been permitted to continue as a class action." Id. at 554, 94 S.Ct. at 766. The intent of the American Pipe suspension rule is to preserve the individual right to sue of members of a proposed class until the issue of class certification has been decided. Crown, Cork & Seal, supra, at 354, 103 S.Ct. at 2398. (Powell, Jr., concurring). Defendants argue that the issue of class certification was decided when this court finally redefined the class in Payne by its order of December 8, 1976. Defendants would, therefore, have the statute of limitations begin running on plaintiffs' claims as early as December 8, 1976 or December 20, 1974, when the court initially redefined the class in Payne to exclude black males. Plaintiffs point to the proposed need for a rule that would not result in a multitude of duplicative filings. They suggest that the putative subclass representatives should not be required to file individual EEOC charges and a new lawsuit while the original plaintiffs in the class action case are still seeking the district court's reconsideration of the limitations on the class and are challenging those limitations on appeal. The American Pipe decision supports the plaintiffs' contention and indicates that the functional purpose of a statute of limitations is to prevent stale lawsuits or suits brought after "evidence has been lost, memories have faded, and witnesses have disappeared." Id. at 554, 94 S.Ct. at 766. Since the Payne action continued to be actively prosecuted, plaintiffs apparently argue that their claims alleged to arise from the same discriminatory actions by defendants could not have become stale. Another purpose often cited for statutes of limitation is to provide the defendant with timely notice of potential claims. As the Supreme Court noted in American Pipe, the filing of a class action by one plaintiff who is found to be representative of a class provides sufficient notice to the defendant of potential additional plaintiffs who may participate in the judgment. Id. at 554-555, 94 S.Ct. at 767. The Supreme Court explained in Crown, Cork & Seal that absent putative class members may remain passive during the early stages of the class action to "rely on the named plaintiffs to press their claims." Id. at 352-353, 103 S.Ct. at 2397. As the Court further explained: "Tolling the statute of limitations thus creates no potential for unfair surprise, regardless of the method class members choose to enforce their rights upon denial of class certification." Id. at 353, 103 S.Ct. at 2397. The obvious question which presents itself is whether a nine-year lapse of time can be characterized as the "early stages of the class action" and whether plaintiffs' action filed after that time represents unfair surprise to the defendants herein. Defendants say it does. Defendants also state that claimants excluded from a class must seek to intervene or file their own suits promptly after decertification. The defendants also suggest that under the rationale of American Pipe and Crown, Cork & Seal, the tolling of the statute of limitations ended either in 1974 or 1976 with respect to these plaintiffs and that their actions are now time-barred. Plaintiffs suggest, alternatively, that until the possibility that the denial of class certification or the restrictions on class membership is "cleared up" on appeal, it is senseless to require unnamed class members to take action. To require putative, prospective class members to file separate lawsuits while issues in the original class action suit remain to be resolved on appeal, plaintiffs say, would constitute the sort of "needless multiplicity of actions" which the Supreme Court sought to prevent with the tolling rule of American Pipe and Crown, Cork & Seal. The court takes due notice that nearly nine years passed from the time these plaintiffs were removed from the class in Payne until the time they filed this action. Black males and females without a 10th-grade education or equivalent were removed 347 from the Payne class on December 20, 1974. The class definition in Payne was made final on December 8, 1976 and was not disturbed by the Court of Appeals' first review of this case on appeal in 1978. In its subsequent review of the Payne matter in 1982, the Fifth Circuit again did not disturb the composition of the class as defined by this court, but merely reversed the opening date restriction. The Fifth Circuit's second decision on appeal was handed down on April 22, 1982. See Payne II, supra. The Supreme Court denied certiorari in Payne II on November 29, 1982. Plaintiffs did not file their motion for leave to intervene in Payne until February 17, 1983 and their complaint in this cause was not filed until September 29, 1983. There are at least five separate dates from which to begin running the statute of limitations against the plaintiffs' claims: (1) December 8, 1976, when this court finalized its earlier redefinition of the class in Payne (thereby denying certification to the subclass plaintiffs represent in the case sub judice); (2) March 23, 1978, when the Fifth Circuit handed down its decision in Payne I; (3) October 2, 1978, when the Supreme Court denied certiorari on Payne I; (4) April 22, 1982, when the Fifth Circuit handed down its latest opinion on appeal in Payne II; or (5) November 29, 1982, when the Supreme Court denied certiorari on Payne II. To come within the required 180-day filing requirement of Title VII, 42 U.S.C. § 2000e-5(e), plaintiffs must rely on November 29, 1982 as the appropriate date for the tolling of the statute of limitations to have ended as to their claim. Any earlier date would render their motion to intervene in February 1983 and their September 1983 filing of this action untimely.[3] The court now comes to the central issue in this case: ascertaining what the Supreme Court meant in American Pipe when it held that "the commencement of the original class suit tolls the running of the statute for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status." Id. at 553, 94 S.Ct. at 766. The enigmatic language is the clause "after the court has found the suit inappropriate for class action status." The defendants argue that the statute of limitations begins to run against putative class members seeking to pursue their individual claims once the court enters any order with regard to the issue of class certification. Plaintiffs on the other hand would have the statute of limitations continue to be tolled until a "final" order is entered. More specifically, the plaintiffs strongly suggest that the statute of limitations did not begin to run on their Title VII claims until the Supreme Court denied certiorari on Payne II in December 1982. The court disagrees with plaintiffs' assessment of the proper "final" order to be considered for the purpose of the running of the statute of limitations. Inasmuch as the Fifth Circuit did not disturb on appeal the district court's redefinition of the class to exclude black males, the court construes the appropriate final order to be the Supreme Court's denial of certiorari on Payne I in 1978. At that point in time, the plaintiffs in this action were put on notice that their rights were no longer being represented by the class action plaintiffs in Payne. If the plaintiffs wished to intervene in Payne or to file separate actions, the appropriate time for doing so was after Payne I.[4] Since the Fifth Circuit ruling did not reverse or otherwise disturb the district court's order of December 8, 1976 redefining the class in Payne to exclude black males, plaintiffs had no basis for delaying their intervention in Payne at that time to seek the certification of a subclass of black males. Nor were plaintiffs justified in assuming that the Fifth Circuit might later require certification of a subclass of black males when Payne went up on appeal once again. As 348 evidenced by the 1982 Fifth Circuit decision in Payne II, no further action whatsoever was taken on the issue of the composition of the class in Payne at that time. See Payne II, supra. Plaintiffs did nothing, however, from 1978 until 1983. Plaintiffs did not file any EEOC charges until May and June of 1983. To paraphrase from the Supreme Court's holding in United Airlines, Inc. v. McDonald, 432 U.S. 385, 394, 97 S. Ct. 2464, 2470, 53 L. Ed. 2d 423: "In short, as soon as it became clear to the [plaintiffs] that the interests of the unnamed class members would no longer be protected by the named class representatives, [they should have] promptly moved to intervene to protect those interests." As to their Title VII claims, the court holds that plaintiffs did not move promptly to protect their interests and their claims under Title VII are now time-barred. Whatever date is applied between the time of the original filing of Payne in 1972 and the Supreme Court's denial of certiorari in 1982, it is clear that plaintiffs did not file a charge with the EEOC within 180 days "after the alleged unlawful practice occurred." 42 U.S.C. § 2000e-5(e). Their Title VII claims must be dismissed as untimely.[5] B. Plaintiffs' Section 1981 Claims Defendants suggest that Section 1981 claims must be filed within six years of the alleged acts of discrimination. Jordan v. Lewis Grocer Co., 467 F. Supp. 113, 116 (N.D.Miss.1979). This appears to be a proper statement of the law under the Supreme Court's mandate that federal courts are to select the "most appropriate" or "most analogous" state statute of limitations where the federal statute involved prescribes no limitation. See Wilson v. Garcia, 471 U.S. 261, 268, 105 S. Ct. 1938, 1943, 85 L. Ed. 2d 254 (1985); Board of Regents v. Tomanio, 446 U.S. 478, 485, 100 S. Ct. 1790, 1795, 64 L. Ed. 2d 440 (1980). The six-year statute of limitations in Mississippi applies to all actions for which no other limitation is prescribed. Miss.Code Ann. § 15-1-49 (1972). The court is directed to no other applicable statute of limitation. Finding as the court has that the tolled statute of limitation began to run again with the Supreme Court's denial of certiorari in 1978, the court finds that the plaintiffs' Section 1981 claims filed in September 1983 were timely. The court therefore finds that defendants' motion to dismiss the plaintiffs' Section 1981 on statute of limitations grounds is not well taken and should be denied. Accordingly, a separate order consistent with this opinion granting defendants' motion to dismiss as to plaintiffs' Title VII claims and denying defendants' motion to dismiss as to plaintiffs' Section 1981 claims will be issued. ON MOTION FOR RECONSIDERATION This cause is presently before the court on the parties' cross-motions for reconsideration and plaintiffs' motion to consolidate. Having reviewed the parties' briefs and being otherwise fully advised in this matter, the court is of the opinion that the defendants' motion and the plaintiffs' motion should be denied. I FACTUAL BACKGROUND[1] The history of this action dates back to 1967. In this employment discrimination action, plaintiffs allege that they were discriminated against during the years 1967 through 1976. Plaintiffs seek relief pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and pursuant 349 to 42 U.S.C. § 1981. The plaintiffs are applicants for intervention in another employment discrimination action pending before this court, Payne v. Travenol Laboratories, Inc., Civ. Act. No. 72-13-D-O. The Payne action has been underway before this court since 1972. The present action was filed allegedly to preserve plaintiffs' rights under the Notices of Right to Sue issued by the Equal Employment Opportunity Commission on June 30, 1983. If plaintiffs had not filed their own suit within the 90-day period prescribed by 42 U.S. C. § 2000e-5(f), and if intervention in the Payne action is not permitted plaintiffs might be barred from filing a new suit. In order to rule on the present motions to reconsider addressed to this court's dismissal of plaintiffs' Title VII claims and denial of the defendants' motion to dismiss plaintiffs' 1981 claims, the court is of the opinion that an abbreviated review of the history of the Payne case would again be helpful at this juncture. A. Brief History of Payne v. Travenol The Payne litigation in which plaintiffs seek to intervene was commenced on March 2, 1972 when Payne and two other individuals filed a class action complaint alleging race discrimination in certain of Travenol's employment practices. On November 16, 1972, this court defined a class for that action consisting of all black employees and applicants for employment at Travenol since March 3, 1970. This class certification became obsolete or meaningless on December 1, 1972 when the Payne plaintiffs sought and were granted leave (on May 1, 1973) to amend their complaint to allege sex discrimination. Thereafter, on May 8, 1973, the sole male plaintiff in Payne, Mr. James Williams, voluntarily withdrew from the case. On July 31, 1972 the court permitted an additional complaint in intervention by Delilah Cherry and Birdie Lee Griffin, alleging discrimination on the basis of both race and sex. On December 20, 1974, this court in Payne determined that a conflict between the original sex discrimination claims and the interests of black males prevented the plaintiffs from adequately representing the interests of the males. The court, therefore, redefined the class so that it did not include males. A two-week trial was held in March 1975 and Judge Orma Smith handed down his decision on liability in the case on February 19, 1976. That decision found that the defendants had discriminated against blacks and women in various respects, including discrimination in the imposition of a 10th-grade education requirement. See Payne v. Travenol Laboratories, Inc., 416 F. Supp. 248 (N.D.Miss.1976). Limited injunctive relief was granted at that time as to this education requirement and the parties' proposals for a final decree were sought. Id. at 265-266. On March 19, 1976, the defendants took an appeal to the Fifth Circuit. The scope of the appeal was limited to the partial injunction entered on February 19, 1976. The Fifth Circuit deferred ruling on the appeal until entry of a final order, so that an appeal from the final order could be consolidated with the limited appeal before the Court of Appeals. On December 9, 1976, this district court made final the definition of the class which had been entered on December 20, 1974. See Payne v. Travenol Laboratories, Inc., 74 F.R.D. 14 (N.D.Miss.1976). In 1978 the Court of Appeals handed down its first decision on appeal of this case. The Fifth Circuit affirmed in part and reversed in part the limited injunction entered below. See Payne v. Travenol Laboratories, 565 F.2d 895 (5th Cir.). (Payne I), cert. denied, 439 U.S. 835, 99 S. Ct. 118, 58 L. Ed. 2d 131 (1978). The court's reversal of the injunction against the 10th-grade education requirement was made on the grounds that: (1) the named plaintiffs had all finally satisfied the requirement by the date that suit was filed; (2) any inability of plaintiff Payne to satisfy the 10th-grade education requirement before March 3, 1970 was irrelevant because the trial court's class definition had removed from consideration all applications for employment submitted prior to March 3, 1970; and (3) the class, by definition, excluded persons who had been harmed by the requirement. 350 On August 18, 1980, the court adopted the United States Magistrate's recommendation for entry of a final decree. Both parties appealed. On April 22, 1982, the Fifth Circuit handed down its second decision on appeal. See Payne v. Travenol Laboratories, Inc., 673 F.2d 798 (5th Cir.) (Payne II), cert. denied, 459 U.S. 1038, 103 S. Ct. 452, 74 L. Ed. 2d 605 (1982). The Court of Appeals upheld the exclusion of black males from the class on the ground that black females alleging claims of both race and sex discrimination had a conflict of interest with black males, whose interests lay only in their claims of race discrimination. Id. at 810-811. The Court of Appeals noted that there was no black male plaintiff to represent the interests of black males and thus a separate subclass of black males could not be created. Id. at 812-813. The Fifth Circuit also held that the district court's decision not to give black males notice of their impending exclusion from the class was not reversible error. Id. at 813. The Court of Appeals also reversed the opening date restriction on class membership. The Court of Appeals held that the class on the Title VII count should extend back to October 31, 1969, and that the class on the Section 1981 count for claims of racial discrimination should extend back to March 2, 1966 if the district court found that there was racial discrimination going back to that date. Id. at 813-815. The Fifth Circuit then remanded Payne for additional proceedings before this court. B. The Byrd Plaintiffs On February 17, 1983 six black applicants, each one a plaintiff in this cause, moved for leave to intervene as additional plaintiffs in Payne. These plaintiffs sought to intervene to resolve the conflict of interest cited by the Fifth Circuit and to expand the class definition to include black males harmed by the same types of racial discrimination which had already been found as to black females. The present plaintiffs were never included as plaintiffs in Payne; however, they now allege race discrimination against black males in Travenol's hiring and promotion practices and race discrimination against blacks allegedly harmed by the prior 10th-grade education requirement. The alleged discrimination reportedly occurred between 1967 and 1976. The motion to intervene is presently pending before this court and will be addressed in a separate ruling in the Payne class at a later date. The EEOC issued Notices of Right to Sue dated June 30, 1983 to each of the applicants for intervention in Payne. To avoid the possibility of losing their right to bring suit during the pendency of their application for leave to intervene, these plaintiffs filed this action on September 29, 1983. With their complaint plaintiffs filed a Related Case Statement and the pending Motion to Consolidate this action with Payne. On October 8, 1987, this court entered a memorandum opinion and order dismissing plaintiffs' Title VII claims but denying defendants' motion to dismiss the plaintiffs' Section 1981 claims. On October 23, 1987, the defendants filed the present motion to reconsider, asking the court to reconsider its denial of the defendants' motion to dismiss plaintiffs' Section 1981 claims on statute of limitations grounds. On November 5, 1987 plaintiffs filed their cross-motion for reconsideration urging the court to reconsider its dismissal of their Title VII claims. On November 12, 1987 defendants filed their answer and opposition to the plaintiffs' pending motion to consolidate. II CONCLUSIONS OF LAW A. Plaintiffs' Title VII Claims In its decision of October 8, 1987, the court ruled that plaintiffs' Title VII claims were time-barred because they did not file their complaint in this action until September 29, 1983 following the Supreme Court's denial of certiorari in Payne II in November 1982. The September 1983 filing of the complaint in this action was found to be 351 beyond the 180-day period prescribed by 42 U.S.C. § 2000e-5(e)[2]. Plaintiffs argue in their motion to reconsider an issue which they assert the court did not reach in its earlier opinion, i.e., whether the filing of the plaintiffs' motion to intervene in Payne was a timely filing which preserved plaintiffs' Title VII claims. See Byrd v. Travenol Laboratories, No. 675 F. Supp. 342, 347 n. 4 (N.D.Miss.1987). The court concludes that this argument is without merit. Even if the plaintiffs' motion to intervene in Payne preserved their claims under the applicable statute of limitations in Payne, the motion to intervene had no effect on the timeliness of this action which was not filed until September 29, 1983. Thus, while plaintiffs' decision to intervene in the Payne litigation may have represented a timely exercise of their rights, the filing of the complaint in this action after the appropriate 180-day period had lapsed rendered the plaintiffs' Title VII claims untimely as concerns the Byrd complaint. The court can discern no authority for the proposition that a motion to intervene in one action tolls the statute of limitations in a separate, independent action. As the Supreme Court held in Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 103 S. Ct. 2392, 76 L. Ed. 2d 628 (1983): Once the statute of limitations has been tolled, it remains tolled for all members of the putative class until class certification is denied. At that point, class members may choose to file their own suits or to intervene as plaintiffs in the pending action. (emphasis added) Id. at 354, 103 S.Ct. at 2397-98. Plaintiffs made the unusual decision in the case sub judice of pursuing both alternatives, seeking to intervene in Payne first and later filing their own suits. The decision to intervene in Payne may have been timely made,[3] however, the filing of the complaint in this action on September 29, 1983 was untimely for the reasons stated above. Plaintiffs have advanced no explanation for their failure to file EEOC charges simultaneously with their motion to intervene in Payne. Accordingly, the court finds that the plaintiffs' motion to reconsider the court's dismissal of their Title VII claims should be denied. B. Plaintiffs' Section 1981 Claims Defendants ask the court to reconsider its earlier denial of their motion to dismiss the plaintiffs' Section 1981 claims on statute of limitations grounds. In this motion to reconsider, defendants argue that the applicable statute of limitation is Mississippi's one-year statute for personal injury claims, Miss.Code Ann. § 15-1-35 (1972), for the plaintiffs' Section 1981 claims and not the previously argued six-year statute, Miss.Code Ann. § 15-1-49 (1972). The plaintiffs concede that the six-year statute may not be the appropriate one, but argue instead that the appropriate statute of limitation is Mississippi's three-year statute, applicable to actions on accounts and unwritten contracts. Miss.Code Ann. § 15-1-29 (1972). The court must determine which statute of limitations applies to plaintiffs' Section 1981 claims because Section 1981 itself contains no limitation provision.[4] In making 352 this determination, the Supreme Court has advised that the "most appropriate" state statute of limitation or the state statute applying to the cause of action most analogous to the cause of action alleged under Section 1981 should be applied. Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 462, 95 S. Ct. 1716, 1721, 44 L. Ed. 2d 295 (1975). Mississippi's six-year statute of limitation, Miss.Code Ann. § 15-1-49, had previously been held to apply to Section 1981 claims alleging discrimination in hiring because the terms of Section 15-1-49 provide that it is applicable to "all actions for which no other period of limitation is prescribed...." Id. Prior to 1985 the Fifth Circuit, in following the Supreme Court's direction to choose the "most analogous" or "most appropriate" state statute of limitation, Burnett v. Grattan, 468 U.S. 42, 49-50, 104 S. Ct. 2924, 2929, 82 L. Ed. 2d 36 (1984), had chosen Mississippi's six-year statute for § 1981 discriminatory hiring claims. Payne v. Travenol Laboratories, Inc., 673 F.2d 798 (5th Cir.), cert. denied, 459 U.S. 1038, 103 S. Ct. 452, 74 L. Ed. 2d 605 (1982); Truvillion v. King's Daughters Hospital, 614 F.2d 520 (5th Cir.1980). For discriminatory terminations challenged under Section 1981, the Fifth Circuit had prior to 1985 applied Mississippi's one-year statute. White v. United Parcel Service, 692 F.2d 1 (5th Cir.1982). In 1985 the Supreme Court decided in Wilson v. Garcia, 471 U.S. 261, 105 S. Ct. 1938, 85 L. Ed. 2d 254 (1985), that "federal interests in uniformity, certainty, and the minimization of unnecessary litigation" required the federal courts "to select, in each State, the one most appropriate statute of limitations for all § 1983 claims." Id. at 275, 105 S.Ct. at 1947. For Section 1983 claims in Mississippi, the Fifth Circuit selected the one-year statute (§ 15-1-35) as the most appropriate period of limitations under the Wilson analysis. Gates v. Spinks, 771 F.2d 916 (5th Cir.1985), cert. denied, 475 U.S. 1065, 106 S. Ct. 1378, 89 L. Ed. 2d 603 (1986). There is nothing in Wilson to suggest that its analysis should apply only to Section 1983 cases. In chief, this case presents the issue of whether the Wilson mandate of selecting the "one most appropriate statute of limitations" for Section 1983 claims should also be applied to Section 1981 claims brought in Mississippi.[5] The Supreme Court suggested in Wilson that "uniformity within each State is entirely consistent with the borrowing principle contained in § 1988." Id. at 275, 105 S.Ct. at 1947. Defendants seemingly argue that if the Wilson analysis is applied to plaintiffs' Section 1981 claims that those claims would be time-barred under Mississippi's one-year statute of limitations. The Supreme Court's recent decisions in Goodman v. Lukens Steel Co., ___ U.S. ___, 107 S. Ct. 2617, 96 L. Ed. 2d 572 (1987) and Saint Francis College v. Al-Khazraji, ___ U.S. ___, 107 S. Ct. 2022, 95 L. Ed. 2d 582 (1987), apparently support the defendants' argument that one statute should be applied to all Section 1981 claims.[6] In Goodman, the Supreme Court implicitly approved the Third Circuit's selection of one Pennsylvania statute as the most appropriate statute of limitation for all Section 1981 actions in that State. Id. ___ U.S. at ___, 107 S.Ct. at 2620-22, 96 L.Ed.2d at 353 581-583. As Justice O'Connor observed, the Supreme Court in Goodman evidenced its "decision to apply a uniform characterization for limitations purposes to actions arising under 42 U.S.C. Section 1981." Id. at ___, 107 S.Ct. at 2636, 96 L.Ed.2d at 600 (O'Connor, J., concurring in judgment and dissenting). There remains the difficult question, however, of whether any single statute selected by this court should be applied retroactively to bar the plaintiffs' Section 1981 actions in the case sub judice. The Supreme Court in Saint Francis College, supra, agreed with the Third Circuit decision not to apply retroactively a newly-selected statute of limitations for Section 1981 claims. Id. ___ U.S. ___, 107 S.Ct. at 2025, 95 L.Ed.2d at 588-589. The Supreme Court counseled that the analysis set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S. Ct. 349, 30 L. Ed. 2d 296 (1971) should be used to determine whether a change from past precedent should be applied retroactively to bar a complaining party's action. Saint Francis College, supra, ___ U.S. at ___, 107 S.Ct. at 2025, 95 L.Ed.2d at 589. In Chevron Oil Co., the Supreme Court set forth three principles to be applied in determining whether a decision should be given retroactive applicability: 1) whether the decision to be applied non-retroactively established a new principle of law or overruled a clear past precedent on which the litigants may have relied; 2) whether the retroactive application of the new rule would be inconsistent with the purpose of the underlying substantive law; and, (3) whether the retroactive application would produce inequitable results. See Chevron Oil Co. at 106-107, 92 S.Ct. at 355. The court addressed each of these factors separately below. 1. Whether the Decision Establishes a New Principle of Law or Overrules a Clear Past Precedent on Which the Litigants May Have Relied The decision in question here is the court's determination of whether to apply Mississippi's one-year statute of limitations to plaintiffs' Section 1981 claims under Gates and Wilson. If this statute is applied, plaintiffs' claims will clearly be time-barred because their complaint was not filed until September 29, 1983. As the court has previously ruled, the statute of limitations began to run on plaintiffs' Section 1981 claims with the Supreme Court's denial of certiorari in 1978. Byrd v. Travenol Laboratories, Inc., 675 F. Supp. 342, 348 (N.D.Miss.1987). Plaintiffs argue that it was obvious, prior to Wilson v. Garcia, that their Section 1981 claims would be governed either by the three-year statute of limitations for breach-of-contract cases[7] Miss.Code Ann. § 15-1-29 (1972), or the residual six-year statute of limitations, Miss.Code Ann. § 15-1-49 (1972), because the cause of action did not conform to any of the common-law causes of action set out in the other Mississippi periods of limitation. Plaintiffs were apparently correct in relying on the six-year statute of limitations "[b]ecause Mississippi has no statute of limitations designed to cover actions seeking redress for the tort of employment discrimination, [thus] the State's catch-all statute is applicable." Truvillion, supra, at 528 (citations omitted). While there is authority to support application of the one-year statute for contractual claims to Section 1981 claims for discriminatory terminations, Breland v. Board of Education of Perry County, 729 F.2d 360 (5th Cir.1984), plaintiffs' "complaint sounds in tort, not in contract." Truvillion, supra, at 528 (citing Ingram v. Steven Robert Corp., 547 F.2d 1260, 1263 (5th Cir.1977)). Prior to Wilson, the Fifth Circuit had apparently not applied the one-year statute for tort claims, Miss.Code Ann. § 15-1-35, to Section 1981 actions. There was no clear prior precedent, however, permitting any reliance or expectation by the plaintiffs that the six-year statute would necessarily 354 be applied.[8] Cases arising under Section 1981 had been decided under both the six-year and the three-year statutes of limitation in Mississippi. Thus, plaintiffs cannot show that the application of the one-year statute urged by the defendants would represent an overruling of clear prior precedent on which they were entitled to rely. As a secondary argument, plaintiffs contend that application of the one-year statute to bar their claims would constitute a decision on "an issue of first impression whose resolution was not clearly foreshadowed...." Chevron Oil Co., supra, at 106, 92 S.Ct. at 355. The basis for this argument is plaintiffs' assertion that it could not possibly have been predicted in 1967 (when the alleged discrimination took place) or at any other time prior to Goodman, that an ordinary Section 1981 employment discrimination claim would be governed by the one-year period of limitation for intentional torts set forth in Miss. Code Ann. § 15-1-35 (1972). The court is not persuaded that plaintiffs had no basis whatsoever for predicting that a single statute might eventually be selected for all Section 1981 claims, especially since the Fifth Circuit had previously applied both the six-year and the one-year statute and there was a discernible need to resolve this inconsistency. Compare Breland, supra, (applying one-year statute) with Truvillion, supra (applying six-year statute). Nevertheless, the court will accept without deciding that plaintiffs have made an adequate showing under the first criterion of the Chevron Oil Co. analysis that the decision to apply Mississippi's one-year statute of limitations to all Section 1981 claims would signify a departure from prior precedent on which plaintiffs were entitled to rely. 2. Whether Retroactive Application Would be Inconsistent With the Purposes of the Under-Lying Substantive Law This principle requires the court to consider whether retroactive application of the new rule of decision will further the purposes of the underlying substantive law to which the new rule applies. The purpose of Section 1983 claims is to permit recovery of damages for tort claims involving personal injuries. Wilson, supra, 471 U.S. at 276, 105 S.Ct. at 1947. The Supreme Court, in deciding Wilson, sought to achieve uniformity and to prevent needless litigation over the statute of limitations applicable to Section 1983 claims occasioned by a case-by-case approach to this question. Id. at 275, 105 S.Ct. at 1947. Similarly, the purpose of Section 1981 claims is to provide a remedy or redress for alleged instances of racially-motivated discrimination. Applying Wilson's analysis to all Section 1981 claims would likewise prevent needless waste of judicial effort and resources "by useless litigation on collateral matters." Wilson, supra, at 275, 105 S.Ct. at 1947. In the case sub judice, the court finds that the second aspect of the Chevron Oil Co. test militates in favor of applying the one-year statute to all Section 1981 claims. The uniformity of a single statute of limitations would, in the opinion of the court, provide clearly needed certainty in this area and would ultimately conserve scarce judicial resources along with the time and effort of litigants.[9] 3. Whether Retroactive Application Would Produce Inequitable Results Since retroactive application of the one-year statute would bar plaintiffs' claim, they predictably argue that retroactivity in *355 this case would clearly produce inequitable results. Plaintiffs also suggest, interestingly, that this case has been litigated for almost 15 years and that retroactive application of a new statute of limitations at this juncture would also be inequitable on that basis. The court states once again that this case and Payne are not synonymous. While the Payne action has been in litigation for 15 years, the Byrd plaintiffs were not original plaintiffs in Payne and did not initiate this action until 1983. In any event, the court agrees that the retroactive application of the one-year statute of limitations would unfairly deny plaintiffs any remedy on the basis of a superseding legal doctrine which was not entirely foreseeable when they initiated this action. See Chevron Oil Co., supra, at 108, 92 S.Ct. at 356. The court is also compelled to quote the Fifth Circuit's most recent pronouncement on the retroactive application of Wilson to Section 1983 actions: We therefore hold that for Mississippi section 1983 actions accruing before Wilson that would clearly have enjoyed a longer than one-year limitations period under applicable pre-Wilson precedent, the appropriate limitations period shall be either (1) the longer pre-Wilson period, commencing at the time the action accrued, or (2) the post-Wilson one-year period, commencing with the date of the Wilson decision, whichever expires first. Hanner v. State of Mississippi, 833 F.2d 55, 59 (5th Cir.1987). The court is of the opinion that when the appropriate case presents itself, the Fifth Circuit will likely apply this same reasoning to Section 1981 actions in compliance with the Supreme Court's decisions in Goodman and Saint Francis College. Construing the "time the action accrued" in this matter to have been the Supreme Court's denial of certiorari in 1978, the court concludes once again that plaintiffs' Section 1981 claims were timely filed. Accordingly, the defendants' renewed motion to dismiss the plaintiffs' Section 1981 claims on statute of limitations grounds is not well taken and will be denied. C. Plaintiffs' Motion to Consolidate When they filed their complaint in 1983, plaintiffs sought to consolidate this matter with Payne. Defendants have recently responded to the plaintiffs' motion and the court now holds that the motion is not well-taken and should be denied. Rule 42(a) of the Federal Rules of Civil Procedure provides that: "When actions involving a common question of law or fact are pending before the court ... it may order all the actions consolidated...." The primary ground for plaintiffs' motion is their assertion that this action concerns the "identical questions of fact and of law which are involved in Payne." Plaintiffs' Motion at 2. The court directs the parties' attention to the fact that Payne involves Title VII claims, while the only remaining claims in the case at bar are Section 1981 actions. In ruling on a motion to consolidate, the court has broad discretion. N.A.A.C.P. of Louisiana v. Michot, 480 F.2d 547, 548 (5th Cir.1973). The decision to consolidate a case which has been in litigation for over 15 years with one initiated only four years ago would not convey the impression of a proper exercise of sound judicial discretion. Cf. St. Bernard General Hospital v. Hospital Service Association of New Orleans, Inc., 712 F.2d 978 (5th Cir.1983), cert. denied, 466 U.S. 970, 104 S. Ct. 2342, 80 L. Ed. 2d 816 (1984). The defendants in this action did not file their answer until November 12, 1987. The Payne litigation is, as defendants remind the court, difficult and complex enough on its own. Payne has already been tried on the liability issue and has been before the Fifth Circuit on appeal twice. Consolidation at this advanced stage of the Payne case would do little in the way of promoting judicial economy. Accordingly, the plaintiffs' motion to consolidate will be denied. A separate order consistent with this opinion will issue. NOTES [1] Aside from their alleged reliance on the Payne plaintiffs to represent their interests, the present plaintiffs apparently took no affirmative action to protect their rights prior to 1983. [2] In its 1982 decision, the Fifth Circuit ruled that this failure to notify black males of their exclusion from the class was not reversible error. Payne II at 811-813. The Court of Appeals did not address the statute of limitations issue in its decision. [3] The court notes that even if the latest date is selected, this action appears untimely because the complaint was not filed until September 1983. [4] The court need not decide at this juncture that plaintiffs' motion to intervene was untimely. The only issue addressed here is whether plaintiffs' September 29, 1983 complaint was timely filed. [5] The Fifth Circuit has held that putative class members may not piggyback one class action onto another and thereby toll the statute of limitations indefinitely. Salazar-Calderon v. Presidio Valley Farmers Ass'n., 765 F.2d 1334 (5th Cir.1985) cert. denied, 475 U.S. 1035, 106 S. Ct. 1245, 89 L. Ed. 2d 353 (1986). In addition to the reasons for denying plaintiffs' Title VII claim as untimely discussed above, Salazar-Calderon appears to be dispositive on the issue as to the putative subclass attempting to piggyback this action onto Payne. [1] The factual findings set forth herein are essentially identical to those set forth in the court's October 8, 1987 memorandum opinion. [2] Plaintiffs assert that their filing of charges with the EEOC on May 19, 1983, many years after the alleged unlawful discriminatory practices, was a timely filing after the Supreme Court's denial of certiorari on November 19, 1982. The court's calculations, however, reveal that the May 19, 1983 filing would have been 181 days after the Supreme Court's denial of certiorari. Thus, the filing of charges with the EEOC by plaintiffs was untimely. Consequently, the filing of this lawsuit within 90 days after the plaintiffs received their notices of right to sue must also be considered untimely. [3] Contrary to what plaintiffs may contend, this action and the Payne action are not one and the same. Therefore, the court is not required to permit this action to continue even if the court should ultimately rule that the plaintiffs are proper intervenors in Payne. Since the Title VII claims of the complaint in this action are time-barred, those claims must be dismissed. [4] In its decision of October 8, 1987, this court accepted without discussion the parties' argument that the six-year statute was the appropriate statute of limitations. The parties now ask the court to reconsider the decision in light of the possible affect of two recent Supreme Court decisions on their earlier argument. [5] Three other circuits have recently held that Wilson does apply to other federal claims in addition to Section 1983 claims. Friedlander v. Troutman, Sanders, Lockerman & Ashmore, 788 F.2d 1500 (11th Cir.1986) (Wilson applied to federal securities claims); Banks v. Chesapeake and Potomac Telephone Co., 802 F.2d 1416 (D.C. Cir.1986) (Wilson applied to Section 1981 claims); Goodman v. Lukens Steel Co., 777 F.2d 113 (3rd Cir.1985), aff'd, ___ U.S. ___, 107 S. Ct. 2617, 96 L. Ed. 2d 572 (1987) (Wilson applied to Section 1981 claims). [6] In Goodman, the Supreme Court ostensibly acknowledged that just as Section 1983 could result in a variety of different actions calling for the application of various different statutes of limitation, "Section 1981 has a much broader focus than contractual rights." Id. ___ U.S. ___, 107 S.Ct. at 2621, 96 L.Ed.2d at 582. Accordingly, the court held that "Wilson's characterization of Section 1983 claims is thus equally appropriate [with Section 1981 claims], particularly since Section 1983 would reach state action that encroaches on the rights protected by Section 1981." Id. [7] The three-year statute was amended in 1976 to a one-year limitation for actions based on unwritten contracts of employment. Miss.Code Ann. § 15-1-29 (Supp.1987). [8] The court also agrees with defendants' argument that plaintiffs had no reason to expect the three-year statute to apply when the only indication that it might was embedded in a footnote in a Louisiana case. Boudreaux v. Baton Rouge Marine Contracting Co., 437 F.2d 1011, 1017 n. 16 (5th Cir.1971). Additionally, the Supreme Court's allusion in Goodman that Section 1981 has a "broader focus than contractual rights", id. ___ U.S. ___, 107 S.Ct. at 2621, 96 L.Ed.2d at 582, suggests to the court that the six-year statute was probably the appropriate pre-Wilson precedent for these plaintiffs' claims. [9] Undeniably, the rationale behind statutes of limitation includes a concern for certainty and finality of decision, which a single statute for all civil rights actions would help to achieve.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1654838/	234 S.W.3d 229 (2007) ARGYLE INDEPENDENT SCHOOL DISTRICT, by and through its BOARD OF TRUSTEES, Appellant/Appellee, v. Jeffrey J. and Janice WOLF, on Behalf of their Minor Children, and Allen and Vicki Zimmerman, on Behalf of their Minor Children, Appellees/Appellants. No. 2-06-336-CV. Court of Appeals of Texas, Fort Worth. August 9, 2007. Rehearing Overruled September 20, 2007. 234 Abernathy, Roeder, Boyd & Joplin, P.C., Charles J. Crawford, McKinney, for Appellant. Jackson Walker, LLP, James D. Bradbury, Fort Worth, for Appellees. PANEL A: CAYCE, C.J.; LIVINGSTON and DAUPHINOT, JJ. OPINION TERRIE LIVINGSTON, Justice. Introduction This is an appeal from the trial court's imposition of a temporary injunction against appellant and cross-appellee Argyle Independent School District (AISD). The injunction enjoins AISD from prohibiting the minor children of appellees and cross-appellants Jeffrey J. and Janice Wolf and Allen and Vicki Zimmerman (appellees) who do not live within AISD boundaries from attending AISD schools during the 2006-07 school year unless appellees pay tuition of $6,487.50 per child, and from retaliating against those children because of appellees' filing of the underlying suit. In three issues, AISD contends that the trial court abused its discretion by entering the temporary injunction because appellees presented no evidence of a probable right to relief on any of their causes of action; because appellees presented no evidence that they faced a probable, imminent, and irreparable injury absent an injunction; and because the evidence showed that appellees are not entitled to equitable relief in that they have unclean hands. In one cross-issue, appellees claim that the trial court abused its discretion by declining to enjoin the AISD Board of Trustees from interfering with appellees' appeal of a Denton Independent School District (DISD) decision declining to detach the street on which appellees live from DISD's boundaries. That appeal is pending before the Texas Commissioner of Education.[1] We reverse and remand. Background Appellees Jeffrey and Janice Wolf moved to the Estates at Tour 18 subdivision in Flower Mound in May 2002, and appellees Allen and Vicki Zimmerman moved there in 2003. Both families purchased homes on Firestone Drive. The Wolfs were told by their realtor and the developer of the subdivision that the entire subdivision, including their home on Firestone Drive, was included within the boundaries of AISD. One reason the Wolfs and Zimmermans moved to Firestone Drive was so that their children could attend AISD schools. 235 Kathy Jessen, an employee in the office of the elementary school that the children living in Tour 18 attended, told Janice that the Wolfs' house was located in AISD.[2] Janice then enrolled her three children in AISD schools. The Wolf children have been attending AISD schools since the 2002-03 school year. The Zimmermans were told the same thing and also enrolled their children in AISD schools.[3] Their children have been attending AISD schools since the 2003-04 school year. They never registered their children as transfer students, nor were they told they needed to do so. Moreover, they were never charged tuition for their children to attend AISD schools. In September 2005, AISD Superintendent Carolyn Pierel received a complaint that children living on Firestone Drive were allowed to attend AISD schools for free even though the houses on one side of that street were located in DISD and the residents paid taxes to DISD, not AISD.[4] In response to the complaint, Superintendent Pierel confirmed that one side of Firestone Drive was located in DISD instead of AISD and determined which children living on Firestone Drive were attending AISD. She then contacted Miriam Pierce, another resident of Firestone Drive whose daughter had been attending AISD schools for several years. As a result of that call, Pierce circulated a petition to Firestone Drive residents asking DISD to release Firestone Drive from its boundaries and asking AISD to annex Firestone Drive.[5] The Wolfs and Zimmermans signed the petition. On April 17, 2006, the AISD Board of Trustees voted to approve the petition to annex Firestone Drive into the district. DISD had not yet voted on the residents' request to detach the street from its boundaries. In the spring of 2006, before the 2005-06 school year ended, appellees preregistered their children with AISD for the 2006-07 school year. On the Affidavit of Residency forms, Janice listed "Argyle" in response to the question, "School District you reside in." Vicki left the answer blank on the forms for two of her children, but she wrote in "Argyle" on the form for her third child. AISD did not demand tuition at the time, nor did it require appellees to register their children as transfer students. Superintendent Pierel admitted that AISD accepted the children's preregistration. 236 The next month, DISD rejected the Firestone Drive residents' transfer petition on May 16, 2006. The Wolfs and Zimmermans appealed that decision to the Texas Commissioner of Education. On June 19, 2006, the AISD Board passed a resolution to allow children of the then-current residents of Firestone Drive to attend AISD schools as transfer students so long as they paid tuition.[6] Although the agenda for the meeting had been posted at the administration building, the wrong agenda had been posted on AISD's website, and the Wolfs and Zimmermans did not know about the meeting until the day it was held. The Wolfs attended the meeting. On July 26, 2006, nineteen days before school was to begin on August 14, Superintendent Pierel sent appellees letters stating that tuition for the 2006-07 school year would be $6,487.50 per child, requesting payment in full before the first day of school, and enclosing a transfer application. The Wolfs were out of town at the time. Appellees did not complete the transfer paperwork or pay tuition; instead, they filed suit "seeking to prevent [AISD] from treating them as non-residents and charging them tuition." Appellees sought a declaratory judgment as well as temporary and permanent injunctive relief. The trial court granted appellees' request for a TRO on August 10, 2006, enjoining AISD from "denying [appellees'] minor children public education by wrongfully requiring payment of tuition and/or by requiring [appellees'] minor children to be enrolled as transfer students prior to attending school commencing on August 14, 2006." After an evidentiary hearing held in August 2006, the Wolfs and the Zimmermans agreed to deposit the requested tuition into the court registry in monthly installments, and the trial court entered a temporary injunction on September 11, 2006 enjoining AISD from (1) denying public education and services to appellees' children during the 2006-07 school year and (2) retaliating against the children because of the filing of the suit.[7] Standard of Review To be entitled to a temporary injunction, the applicant must plead a cause of action and show a probable right to recover on that cause of action and a probable, imminent, and irreparable injury in the interim. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex.2002); Fox v. Tropical Warehouses, Inc., 121 S.W.3d 853, 857 (Tex.App.-Fort Worth 2003, no pet.). A probable right of recovery is shown by alleging a cause of action and presenting evidence tending to sustain it. Fox, 121 S.W.3d at 857; Miller Paper Co. v. Roberts Paper Co., 901 S.W.2d 593, 597 (Tex.App.-Amarillo 1995, no writ). An injury is irreparable if damages would not adequately compensate the injured party or if they cannot be measured by any certain pecuniary standard. Butnaru, 84 S.W.3d at 204; Fox; 121 S.W.3d at 857; see T-N-T Motorsports, Inc. v. Hennessey 237 Motorsports, Inc., 965 S.W.2d 18, 24 (Tex. App.-Houston [1st Dist.] 1998, pet. dism'd). The purpose of a temporary injunction is to preserve the status quo until a trial on the merits. Butnaru, 84 S.W.3d at 204; Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex.1993); Fox, 121 S.W.3d at 857. "Status quo is defined as `the last, actual, peaceable, noncontested status which preceded the pending controversy.'" Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 577 (Tex.App.-Austin 2000, no pet.) (quoting Transp. Co. v. Robertson Transps., Inc., 152 Tex. 551, 261 S.W.2d 549, 553-54 (1953)). In an appeal from an order granting or denying a temporary injunction, the scope of review is restricted to the validity of the order granting or denying relief. Walling, 863 S.W.2d at 58; Fox, 121 S.W.3d at 857; Thompson, 24 S.W.3d at 576. Whether to grant or deny a request for a temporary injunction is within the trial court's discretion, and we will not reverse its decision absent an abuse of discretion. Butnaru, 84 S.W.3d at 204; Walling, 863 S.W.2d at 58; Fox, 121 S.W.3d at 857. Accordingly, when reviewing such a decision, we must view the evidence in the light most favorable to the trial court's order, indulging every reasonable inference in its favor, and determine whether the order was so arbitrary that it exceeds the bounds of reasonable discretion. Fox, 121 S.W.3d at 857; Thompson, 24 S.W.3d at 576; CRC-Evans Pipeline Int'l, Inc. v. Myers, 927 S.W.2d 259, 262 (Tex.App.-Houston [1st Dist.] 1996, no writ). A trial court does not abuse its discretion if it bases its decision on conflicting evidence and evidence in the record reasonably supports the trial court's decision. Davis v. Huey, 571 S.W.2d 859, 862 (Tex.1978); Fox, 121 S.W.3d at 857; Myers, 927 S.W.2d at 262. Probable Right to Relief In its first issue, AISD contends that appellees presented no evidence of a probable right to relief on any of their claims. Appellees primarily sought (1) both a temporary and permanent injunction prohibiting AISD from treating their children as transfer students, charging them tuition to attend AISD schools, and denying them admission to AISD schools unless they paid tuition and (2) a declaratory judgment asking the trial court to declare that AISD cannot treat their children as transfer students, charge tuition, or otherwise deny their children "free public education and services in AISD." They claim that they are third party beneficiaries to a contract between AISD and the developer of Tour 18 that permits the children of Firestone Drive residents to attend AISD without tuition.[8] They also claim that, as a result of this alleged contract and other actions by the AISD Board, AISD is estopped from denying that it has agreed to allow the children of Firestone Drive to attend AISD schools free of charge and that AISD would be unjustly enriched by charging them tuition for their children to attend AISD schools. Appellees further contend that they are entitled to relief because AISD violated the Open Meetings Act, "other Texas statutes,"[9] and their right to procedural due process. A party seeking a temporary injunction must have at least one valid legal 238 theory to support a probable right to recover. Marketshare Telecom, L.L.C. v. Ericsson, Inc., 198 S.W.3d 908, 922 (Tex. App.-Dallas 2006, no pet.); Brammer v. KB Home Lone Star, L.P., 114 S.W.3d 101, 110 (Tex.App.-Austin 2003, no pet.). Accordingly, we will review each of appellees' theories to determine whether they demonstrated a probable right to recover on their claims for declaratory and injunctive relief. See Marketshare Telecom, 198 S.W.3d at 922. Contractual and Quasi-contractual Theories Appellees contend that they are third party beneficiaries of a contract between AISD and Gary VanTrease, the developer of Tour 18, as evidenced by an October 20, 1997 letter from then-superintendent Mickey Koonce to Van Trease and as later ratified by the AISD Board. AISD contends that no valid contract was formed between AISD and VanTrease, that Koonce did not have authority to bind AISD, and that even if a valid contract existed, appellees were not intended third party beneficiaries of that contract. The letter from Koonce to VanTrease reads as follows: I have enclosed a copy of the minutes of the Argyle ISD Board of Trustees meeting in which you asked that the students living on the one street of The Estates at Tour 18 which is in the Denton ISD to be allowed to attend the Argyle ISD. I have also enclosed a copy of the transfer policy. After reviewing the policy, the Board did not need to take action. However, the Board was in agreement that with our current policy, these student [sic] could be accepted into the district with no tuition charge. [Emphasis added.] The copy of the letter that AISD provided to appellees[10] did not have any minutes or transfer policy attached. Superintendent Pierel testified that she could not find a copy of the letter in AISD's records, but that she obtained a copy from DISD. Appellees introduced minutes from a June 9, 1997 AISD Board meeting stating that "[d]uring Administration comments, Dr. Koonce informed the Board that it had been discovered that one street in the Tour 18 development was in the Denton ISD." They also introduced minutes from an August 18, 1997 meeting stating that Mr. Gary Van Trease, resident and builder in Tour 18 Development, made a presentation to the Board in reference to the one street of this housing addition which is in the Denton ISD and not the Argyle ISD. The Board took no action at this time. Dr. Koonce was asked to investigate any legal ramifications should these students be allowed to attend the Argyle ISD when the policy states that we do not accept transfers. [Emphasis added.] Minutes from the September 15, 1997 meeting state that "[n]o action was taken on altering the transfer policy." And, finally, the second page[11] of minutes from an August 28, 1998 special meeting state, "Jim Wallace asked about the student who lives on the Denton ISD street of Tour 18. The Board asked if our policy needed to be changed." The fact that a person might receive an incidental benefit from a contract to which he or she is not a party does not give that person a right of action to enforce the contract. MCI Telecomms. 239 Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 650-51 (Tex.1999). A third party may recover on a contract made between other parties only if the parties entered into the contract directly for the third party's benefit. Id. To qualify as one for whose benefit the contract was made, the third party must show that she is either a donee or creditor beneficiary of, and not one who is benefitted only incidentally by the performance of, the contract. Id. In determining whether a third party can enforce a contract, the intention of the contracting parties is controlling. Id. A court will not create a third-party-beneficiary contract by implication. Id. The intention to contract or confer a direct benefit to a third party must be clearly and fully spelled out, or enforcement by the third party must be denied. Id. Consequently, a presumption exists that parties contracted for themselves unless it clearly appears that they intended a third party to benefit from the contract. Id. Here, there is no indication that the Board authorized Koonce to enter into a contract with VanTrease. A school district may act only by and through its board of trustees. TEX. EDUC.CODE ANN. § 11.151 (Vernon 2006); Royse ISD v. Reinhardt, 159 S.W. 1010, 1011 (Tex.Civ.App.-Dallas 1913, writ ref'd). There is no evidence that the Board authorized the letter, or that it even knew of its contents.[12]See Thermo Prods. Co. v. Chilton ISD, 647 S.W.2d 726, 732 (Tex.App.-Waco 1983, writ ref'd n.r.e.) ("[F]or the acts of the governmental body to be valid, it must act as a body."). The evidence shows only that the Board was informed in 1997 that part of Firestone Drive was located in DISD, that AISD's policy at that time was not to accept transfer students, that the Board took no action to change the policy, and that the Board authorized Koonce only to investigate the legal ramifications of letting children on Firestone Drive attend AISD for free. There is no indication that the Board ever authorized Koonce to send the 1997 letter.[13] Appellees contend that even if Koonce was not authorized to send such a letter, he had apparent authority to bind the school district. Apparent authority arises through acts of participation, knowledge, or acquiescence by the principal that clothe the agent with the indicia of apparent authority. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 672 (Tex.1998); Tex. Cityview Care Ctr., L.P. v. Fryer, 227 240 S.W.3d 345, 352-53 (Tex.App.-Fort Worth 2007, no pet. h.). Certain limitations apply in determining whether apparent authority exists. Tex. Cityview Care Ctr., 227 S.W.3d at 352-53; Lifshutz v. Lifshutz, 199 S.W.3d 9, 22 (Tex.App.-San Antonio 2006, pets. denied); Suarez v. Jordan, 35 S.W.3d 268, 272 (Tex.App.-Houston [14th Dist.] 2000, no pet.). First, apparent authority is determined by looking to the acts of the principal and ascertaining whether those acts would lead a reasonably prudent person using diligence and discretion to suppose the agent had the authority to act on behalf of the principal. Tex. Cityview Care Ctr., 227 S.W.3d at 352-53; Lifshutz, 199 S.W.3d at 22; Suarez, 35 S.W.3d at 272. Only the conduct of the principal may be considered; representations made by the agent of her authority have no effect. Tex. Cityview Care Ctr., 227 S.W.3d at 352-53; Lifshutz, 199 S.W.3d at 22-23; Suarez, 35 S.W.3d at 272. Second, the principal must either have affirmatively held the agent out as possessing the authority, or the principal must have knowingly and voluntarily permitted the agent to act in an unauthorized manner. Tex. Cityview Care Ctr., 227 S.W.3d at 352-53; Lifshutz, 199 S.W.3d at 23; Suarez, 35 S.W.3d at 272. Finally, a party dealing with an agent must ascertain both the fact and the scope of the agent's authority, and if the party deals with the agent without having made such a determination, she does so at her own risk. Tex. Cityview Care Ctr., 227 S.W.3d at 352-53; Lifshutz, 199 S.W.3d at 23; Suarez, 35 S.W.3d at 272. Appellees contend that the Board's failure to revoke the 1997 letter shows that Koonce had apparent authority to bind AISD to accept Firestone Drive residents' children into the district without registering as transfer students or paying tuition. But there is no evidence that the Board was aware of Koonce's letter. Although Superintendent Pierel obtained a copy of the letter from DISD in 2006 after Jeffrey Wolf asked for it pursuant to an open records request, there is no evidence as to how DISD received a copy or from whom. Thus, the Board's failure to revoke the letter cannot work to confer apparent authority upon Koonce when there is no evidence that the Board knew of its existence in the first place or that it had authorized Koonce to do anything beyond investigate the legal ramifications of letting the children attend AISD in contravention of the then-current transfer policy. Furthermore, even if the letter could be considered an authorized, enforceable contract, the language in the letter indicates only that the students "could be" admitted without payment of tuition based on AISD's "current policy." Such language could not bind the district to allow these students to attend its schools tuition-free in perpetuity, nor could it restrict the district from changing its policy in the future. Accordingly, we conclude and hold that appellees did not offer any evidence that AISD entered into a valid, authorized contract with VanTrease that was intended to be enforceable by the residents of Firestone Drive. See TEX. EDUC.CODE ANN. § 11.151; Tex. Cityview Care Ctr., 227 S.W.3d at 352-54 (holding arbitration agreement invalid because there was no evidence that daughter had authority to bind her mother to agreement). Estoppel Defense Appellees asserted in their pleadings that even if the evidence failed to show the existence of a valid, enforceable contract by which AISD would be bound to the residents of Firestone Drive, AISD was estopped from denying the existence of 241 such an agreement based on "AISD's long-standing treatment of [appellees'] children as students of AISD, AISD's representations to the Firestone [Drive] residents, and AISD's course of conduct." Appellees claim that AISD should be estopped from treating their children as transfer students or charging them tuition to attend AISD schools. AISD answered that, as a governmental entity performing a governmental function, it is not subject to estoppel, and that even if estoppel could be applied to a school district, appellees failed to show a probable right to recover on their claims for declaratory and permanent injunctive relief based on an estoppel theory. Applicable Law Equitable estoppel is not a cause of action but may be asserted as a defensive plea to bar a defendant from raising a particular defense. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156 n. 1 (Tex.2004); Collins v. Allied Pharmacy Mgmt., Inc., 871 S.W.2d 929, 936 (Tex.App.-Houston [14th Dist.] 1994, no writ) ("[E]stoppel is a shield, not a sword."). The elements of equitable estoppel are (1) a false representation or concealment of material facts, (2) made with knowledge, actual or constructive, of those facts, (3) with the intention that it should be acted on, (4) to a party without knowledge or means of obtaining knowledge of the facts, (5) who detrimentally relies on the representations. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515-16 (Tex.1998); Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 932 (1952). The supreme court has held that a governmental entity is not subject to estoppel when it exercises its governmental powers. Leeco Gas & Oil Co. v. Nueces County, 736 S.W.2d 629, 630 (Tex.1987); City of Hutchins v. Prasifka, 450 S.W.2d 829, 835 (Tex. 1970); see also City of White Settlement v. Super Wash, Inc., 198 S.W.3d 770, 773 (Tex.2006) (explaining origin of rule with reference to cities). But the supreme court has "also found `authority for the proposition that a municipality may be estopped in those cases where justice requires its application, and there is no interference with the exercise of its governmental functions.'"[14]Super Wash, 198 S.W.3d at 774 (emphasis added) (quoting Prasifka, 450 S.W.2d at 836); see City of San Antonio v. TPLP Office Park Props., 218 S.W.3d 60, 67 (Tex.2007) (acknowledging exception but holding that facts of case did not warrant application of exception to actions of municipality); Odessa Tex. Sheriff's Posse, Inc. v. Ector County, 215 S.W.3d 458, 469-70 (Tex.App.-Eastland 2006, pet. denied) (acknowledging general rule and discussing applicability of exception); Kelley v. Tex. State Bd. of Dental Exam'rs, 530 S.W.2d 132, 135 (Tex. Civ.App.-Fort Worth 1975, writ ref'd n.r.e.) (citing Prasifka as authority for exception when State entity is performing governmental function). This exception applies "only in exceptional cases [in which] the circumstances clearly demand its application to prevent manifest injustice." Super Wash, 198 S.W.3d at 774 (quoting Prasifka, 450 S.W.2d at 836). The supreme court has applied the exception in only two cases in which city officials acted deliberately to induce a party to act in a way that benefitted the city but prejudiced the party. 242 Id. at 775. The court, not the jury, determines whether the exception applies. Id. at 774. Analysis AISD contends generally that estoppel cannot be asserted against school districts; that even if it can be applied against school districts, there is no evidence of "manifest injustice" in this case that would warrant application of the exception to the general rule that a governmental entity is not subject to estoppel except in "exceptional cases in which the circumstances clearly demand its application to prevent manifest injustice"; and, finally, that even if the estoppel exception applies, appellees have not proven a probable right to recover on the merits of their claims based on the theory that AISD is estopped from denying an agreement to admit the Firestone Drive children into the district without charging tuition. We need not decide AISD's first two complaints as to whether estoppel can be used against it in the first place because we determine that appellees failed to show a probable right to recover on the merits of their claims based on their estoppel theory.[15] The trial court's order granting the temporary injunction stated the following: The court finds that [appellees] have established probable success on the merits because the evidence in this case demonstrates that it is an exceptional case requiring the application of estoppel to prevent manifest injustice to [appellees] and their children. In so concluding, this Court is not intending to interfere with AISD's exercise of its government[al] powers, but instead is maintaining the status quo so that the parties' rights can be determined. [Emphasis added.] When announcing its decision to grant the injunction after the hearing, the trial court noted, I believe that this falls into one of those limited circumstances in that for this school year they were previously enrolled in the spring [2006] thinking they were going to go to [AISD]. The school district got the complaint back in September of 2005. They didn't at that point in time say, as an abundance of caution, you may be required to pay X amount of dollars in tuition. And even when they made the resolution on June 19th, . . . even then the school district didn't tell them you have to do X amount of dollars. In fact, that didn't come up until just before school started. And so I think it would be unfair for this school year to not give them an opportunity 243 to find other arrangements. . . . [Emphasis added.] It is clear from the trial judge's comments at the hearing that he believed it would be manifestly unjust for AISD (1) to accept the 2006-07 school year preregistration forms for appellees' children in the spring of 2006 without informing them that they could be charged tuition to attend AISD for that school year, (2) to allow appellees to believe that their children were indeed preregistered for the 2006-07 school year without payment of tuition,[16] and (3) to then attempt to force appellees to prepay tuition for the entire school year in full just days before the 2006-07 school year began. When appellees' children started attending AISD schools, the district's official, published policy was that [n]o nonresident students shall be permitted to attend District schools, except as provided by this policy. . . . Nonresident students may continue in attendance under this policy on a tuition basis. . . . The Board shall determine annually and within statutory limits the amount of tuition, if any, to be charged. . . . The Board may waive tuition for a student upon written application by the student or parent or guardian, upon the recommendation of the Superintendent. . . . The District may initiate withdrawal of students whose tuition payments are delinquent. Appellees contend that they presented the following evidence tending to support their estoppel theory: the 1997 letter from Koonce to VanTrease, the language in the June 19, 2006 resolution stating that "this Resolution is conditioned upon Firestone Drive not being annexed into the [AISD]," and section 25.038 of the education code. Appellees contend that they relied on the letter in enrolling their children in AISD and in believing that their children could attend AISD without having to register as transfer students or pay tuition. But the evidence shows that appellees did not know of the existence of the letter until 2006after they signed the petition to have their street released from DISD and included in AISD. Thus, appellees could not have relied on the letter to support their children's continued enrollment in AISD after they had already learned that their lots were located in DISD rather than AISD. For estoppel to apply against a governmental entity, the person seeking to estop the entity must show, among other things, that he or she relied on an act authorized by the entity. City of San Angelo v. Deutsch, 126 Tex. 532, 91 S.W.2d 308, 309 (1936); Maguire Oil Co. v. City of Houston, 69 S.W.3d 350, 366 (Tex.App.-Texarkana 2003, pet. denied). But we have already determined that there is no evidence that the Board authorized, or even was aware of, the letter from Koonce to VanTrease. Thus, the letter cannot support appellees' estoppel defense. Cf. Bowman v. Lumberton ISD, 801 S.W.2d 883, 888 (Tex.1990) (op. on reh'g) (Estoppel my apply against a subdivision of government "where the governing body is a board . . . if the evidence clearly indicates that the subordinate officer's act was done with the knowledge of the governing body and was so closely related to the expressed will of the governing body [so] as to constitute [the officer's act] that of the board . . . itself."); La Villa ISD v. Gomez Garza 244 Design, Inc., 79 S.W.3d 217, 221-22 (Tex. App.-Corpus Christi 2002, pet. denied) (estopping school district from asserting that superintendent had no authority from board to enter into construction design contract when evidence showed that superintendent's action was taken with the board's "knowledge and implicit approval"). Moreover, as we have previously stated, the letter does not say that the Firestone Drive residents' children would be able to attend AISD schoolsupon payment of tuition or otherwisein perpetuity.[17] It specifically refers to AISD's current policy and that the children "could be," not "definitely would be," accepted into the district with no tuition charge; it does not indicate how long such students would be able to attend on a nontuition basis, nor does it promise that the Board would never change the 1997 transfer policy. Thus, the trial court could not use the letter as a basis for estopping AISD from denying the existence of an agreement allowing the Firestone Drive residents' children to attend AISD schools for free indefinitely. Appellees next contend that they showed that AISD is estopped from charging them tuition because of the language in the resolution that it was "conditioned upon Firestone Drive not being annexed into" AISD. The recitals in the resolution begin with the acknowledgment that the Firestone Drive residents signed the petition, and that as a result, AISD approved the petition to annex Firestone Drive, but that DISD voted to reject it. It then acknowledges that AISD "has permitted the residents of Firestone Drive to attend the District without the payment of tuition" and notes the residents' community ties with AISD and their belief when they bought their homes that their children could attend AISD. The resolution then contains the following recitals: WHEREAS, the [AISD] is not accepting new transfer students; WHEREAS, the [AISD] has been requesting other transfer students to pay tuition; WHEREAS, the [AISD's] lack of available funds necessitates the District requiring all nonresident students to pay tuition. It also includes the following resolutions, in pertinent part: RESOLVED, That current residents of Firestone Drive may be permitted to attend [AISD] upon the payment of tuition and in accordance with District Policy governing student transfers; RESOLVED, That residents that move to Firestone Drive after the adoption of this Resolution shall not be granted a transfer into [AISD]; RESOLVED, That this Resolution is conditioned upon Firestone Drive not being annexed into the [AISD]; RESOLVED, That the [AISD] reserve[s] the right to rescind this Resolution at any time with or without cause; Appellees contend that because their appeal of DISD's decision had been filed when the Board passed the resolution, they relied on the conditional language to mean that the Board did not intend to charge tuition until that appeal was resolved. The trial court stated that it thought the resolution "was inartfully drafted when it does talk about the condition of the annexation, which I think could be interpreted tosomebody could rely on 245 that that [sic] meant we're going to wait and see what the final decision is going to be." Accepting as true appellees' evidence that they relied on this language to mean that AISD would not charge them tuition until after the conclusion of the DISD appeal, we nevertheless observe that there is no evidence that AISD intended for appellees to act in reliance upon this language, i.e., by failing to prepare for the possibility of paying tuition or by failing to make arrangements to enroll in DISD or a private school. Although an inference can be made that AISD deliberately waited until less than a month before the beginning of the 2006-07 school year to inform appellees of the tuition amount in an effort to force them to enroll in DISD instead of AISD if they could not afford to pay the tuition, there is no evidence in the record of such an intent.[18] One of the resolutions clearly states that attendance by current Firestone Drive residents is conditioned upon payment of tuition. Superintendent Pierel also testified that AISD's Board does not get any concrete budget numbers for the next school year until "usually the first part of the summer." She also testified that the resolution was drafted by AISD's attorney. Even construing the evidence in the light most favorable to the trial court's ruling, appellees have not shown a probable right to recover as a result of the language in the resolution. Finally, appellees contend that AISD is estopped from charging them tuition by virtue of section 25.038 of the education code, which provides that "unless a tuition fee is prescribed and set out in a transfer agreement before its execution by the parties, an increase in tuition charge may not be made for the year of that transfer that exceeds the tuition charge, if any, of the preceding school year." TEX. EDUC.CODE ANN. § 25.038 (Vernon 2006). Here, the July 26, 2006 letter that Superintendent Pierel sent appellees listed the tuition as $6,487.50, but the "2006-07 Application for Transfer on Tuition Basis" that she included with the letter did not show a tuition amount. Appellees contend that because no tuition amount was included in the application, it does not meet the requirements of section 25.038. To the extent that the application could be considered a "transfer agreement" under section 25.038,[19] there is no evidence that AISD made any false representations or concealed any material fact with the intent that appellees rely on the representation or concealment. Superintendent Pierel's accompanying letter plainly states the tuition amount and the payment requirements, as does her email to Jeffrey Wolf. As a result, appellees have not shown a probable right to recover on their claims under an estoppel theory based on section 25.038. 246 Accordingly, for the reasons set forth above, considering the record in the light most favorable to the trial court's ruling, we conclude that appellees did not bring forward evidence tending to show a probable right to recover on the merits of their claims supported by their estoppel theory.[20] Moreover, even if this evidence could be construed as tending to show a probable right to recover on the merits of their claims based on proof of their estoppel theory, we do not believe that these facts rise to the level of "manifest injustice" that would be required were we to determine that the exception to the general rule that school districts are generally not subject to estoppel is applicable.[21] Although it would have been more convenient to appellees if AISD had given them more notice of the tuition requirement for the 2006-07 school year and allowed them to pay it in monthly installments, there is no evidence that AISD "acted deliberately to induce [appellees] to act in a way that benefitted [AISD] but prejudiced" appellees. Super Wash, 198 S.W.3d at 775. In addition, appellees have failed to show that AISD's actions have resulted in a permanent loss of their claims against AISD; for example, appellees have not sought a waiver of tuition payments in accordance with AISD's current transfer policy,[22] nor have they appealed AISD's decision to the Texas Commissioner of Education. Accordingly, we conclude and hold that the trial court's injunction cannot be upheld based on appellees' estoppel theories.[23] Unjust Enrichment Appellees also pled that because AISD has the ability to immediately detach land to approve the land trade which AISD's superintendent previously indicated would be acceptable to AISD,[24] AISD will be unjustly enriched by charging tuition to Firestone [Drive] residents. . . . AISD will receive per diem payments from the [S]tate of Texas for [appellees'] children. This is the same amount AISD will receive when annexation of the Firestone properties is complete. To charge [appellees] tuition in addition to receiving money from the State will unjustly enrich AISD. Unjust enrichment, itself, is not an independent cause of action but rather "characterizes the result of a failure to make restitution of benefits either wrongfully or passively received under circumstances that give rise to an implied or quasi-contractual obligation to repay." Friberg-Cooper Water Supply Corp. v. Elledge, 197 S.W.3d 826, 832 (Tex.App.-Fort Worth 2006, pet. filed) (quoting Walker v. Cotter Props., Inc., 181 S.W.3d 895, 900 (Tex.App.-Dallas 2006, no pet.)); Mowbray v. Avery, 76 S.W.3d 663, 679 (Tex.App.-Corpus Christi 2002, pet. denied); see Best 247 Buy Co. v. Barrera, 214 S.W.3d 66, 73 (Tex.App.-Corpus Christi 2006, pet. filed). The doctrine applies the principles of restitution to disputes where there is no actual contract, based on the equitable principle that one who receives benefits that would be unjust for him to retain ought to make restitution. Friberg-Cooper, 197 S.W.3d at 832; Mowbray, 76 S.W.3d at 679. Unjust enrichment is not a proper remedy "merely because it `might appear expedient or generally fair that some recompense be afforded for an unfortunate loss' to the claimant, or because the benefits to the person sought to be charged amount to a windfall." Heldenfels Bros. Inc. v. City of Corpus Christi, 832 S.W.2d 39, 42 (Tex. 1992) (quoting Austin v. Duval, 735 S.W.2d 647, 649 (Tex.App.-Austin 1987, writ denied)); Mowbray, 76 S.W.3d at 679. To recover under an unjust enrichment theory, the benefits to the other party must be actually unjust under the principles of equity. Mowbray, 76 S.W.3d at 679; Burlington N.R.R. v. Sw. Elec. Power Co., 925 S.W.2d 92, 97 (Tex.App.-Texarkana 1996), aff'd, 966 S.W.2d 467 (Tex. 1998). AISD's accountant, Paul Lyles, testified that the district does not receive state funds for students if it receives tuition for their attendance. Appellees presented no evidence to the contrary; accordingly, we hold that appellees did not produce evidence tending to show a probable right to recover on an unjust enrichment theory. Alleged Violation of Open Meetings Act Appellees also contended that AISD violated the Open Meetings Act by failing to provide proper notice of the June 19, 2006 meeting agenda, misrepresenting the agenda on its website and falsely certifying that the correct agenda had been timely posted on the website in accordance with the Open Meetings Act, and by voting without discussion or deliberation in open session. Appellees allege that the acts taken by the Board before and during that meeting are therefore voidable under section 551.141 of the government code, that they are entitled to declaratory relief that the acts of the Board taken on June 19, 2006 are void, and that they are entitled to injunctive relief to enjoin these void actions. They also contend that as a result of the Open Meetings Act violation, the Board's actions at that meeting failed to change the status of appellees' children from "in-district" students to transfer students and, further, that it would be unlawful to charge tuition for "in-district" students. The Open Meetings Act requires every regular, special, or called meeting of a governmental body, including school boards of trustees, to be open to the public unless otherwise required by the Act. TEX. GOV'T CODE ANN. §§ 551.001(3)(e), .002 (Vernon 2004); City of San Benito v. Rio Grande Valley Gas Co., 109 S.W.3d 750, 757 (Tex.2003). "Governmental actions in violation of the Open Meetings Act are voidable." TEX. GOV'T CODE ANN. § 551.141; Olympic Waste Servs. v. City of Grand Saline, 204 S.W.3d 496, 504 (Tex.App.-Tyler 2006, no pet.). Generally, under the Open Meetings Act, seventy-two hours' written notice shall be given of the date, hour, place, and the subject matter of each meeting held by the governmental body. TEX. GOV'T CODE ANN. § 551.041 (Vernon 2004), § 551.043 (Vernon Supp.2004); City of Port Isabel v. Pinnell, 207 S.W.3d 394, 406 (Tex.App.-Corpus Christi 2006, no pet.); Hill v. Palestine ISD, 113 S.W.3d 14, 16 n. 3 (Tex. App.-Tyler 2004, pet. denied). A school district must post notice of each meeting "on a bulletin board at a place convenient to the public in the central administrative office of the district." TEX. GOV'T CODE ANN. § 551.051. In addition, a school district 248 that maintains an Internet website must concurrently post notice of each meeting on its website; a school district "that contains all or part of the area within the corporate boundaries of a municipality with a population of 48,000 or more" must also concurrently post the agenda for each meeting on its website. Id. § 551.056(a)(c) (Vernon Supp.2006). However, "[t]he validity of a posted notice of a meeting or an agenda by a governmental body . . . subject to [551.056] that made a good faith attempt to comply with [its] requirements . . . is not affected by a failure to comply with a requirement of [551.056] that is due to a technical problem beyond the control of the governmental body." Id. § 551.056(d). The intent of the Act is to safeguard the public's interest in knowing the workings of its governmental bodies. Cox Enters., Inc. v. Bd. of Trs. of Austin ISD, 706 S.W.2d 956, 960 (Tex.1986); Stockdale v. Meno, 867 S.W.2d 123, 124-25 (Tex.App.-Austin 1993, writ denied). The intended beneficiaries of the Act are not individual citizens, but members of the interested public. City of San Antonio v. Fourth Court of Appeals, 820 S.W.2d 762, 765 (Tex.1991) (orig.proceeding); Stockdale, 867 S.W.2d at 125. The supreme court explained in City of San Antonio that [t]he Open Meetings Act is not a legislative scheme for service of process; it has no due process implications. Rather, its purpose is to provide "openness at every stage of [a governmental body's] deliberations.". . . . [W]e need not . . . inquire into whether a notice was tailored to reach those specific individuals whose private interests are most likely to be affected. City of San Antonio, 820 S.W.2d at 765 (citations omitted); Stockdale, 867 S.W.2d at 125. Accordingly, appellees are not entitled to any notice other than that given to the public at large. See Stockdale, 867 S.W.2d at 125. The evidence at the hearing was undisputed that AISD posted the following agenda item on the bulletin board at the administration building at 5:00 p.m. on June 16, 2006, at least seventy-two hours before the 6:00 p.m. June 19, 2006 meeting: "Consider approving resolution allowing the current residents of Firestone Drive to attend [AISD] upon payment of out of District tuition." The parties stipulated that AISD's webmaster received the correct agenda to post seventy-two hours before the June 19, 2006 meeting, but he created a bad link, so the May 19 meeting agenda appeared instead of the June 19 agenda. They also stipulated that this problem was beyond the school district's control. The link was corrected a few hours before the meeting began. The May 19 meeting agenda did not have any item referring to the charging of tuition for Firestone Drive residents. The superintendent never informed appellees or any of the other Firestone Drive residents personally about the tuition issue being on the agenda. Jeffrey Wolf testified that his neighbors called the administration office on June 16 and were told that the Firestone Drive residents were not on the agenda for the June 19 meeting. However, because he and Janice attended the meeting, it is undisputed that they had at least some notice of the meeting. The evidence at the hearing showed that AISD complied with the notice requirements of section 551.051 and attempted to comply with the requirements of section 551.056 regarding posting notice on the website. There is no evidence of any bad faith by AISD in its webmaster's inadvertent posting of a bad link to the wrong agenda for the June 19 meeting. Accordingly, appellees failed to present evidence 249 tending to show a probable right to recover on their Open Meetings Act claim based on a lack of notice. See TEX. GOV'T CODE ANN. §§ 551.051, .056(d). Appellees also contended that the Board improperly voted on the resolution without deliberation in an open meeting. There is no evidence indicating that the Board deliberated on the matter in a closed meeting, and the Open Meetings Act does not require the Board to deliberate before voting. See United ISD v. Gonzalez, 911 S.W.2d 118, 127 (Tex.App.-San Antonio 1995), writ denied, 940 S.W.2d 593 (Tex.1996); cf. TEX. GOV'T CODE ANN. § 551.082 (Vernon 2004) (allowing school district to deliberate on student disciplinary matter or complaint by employee against another employee in closed session unless parent or guardian of student or employee against whom charges are brought requests otherwise in writing). Accordingly, we conclude and hold that appellees did not present any evidence tending to show a probable right to recover on their claims based on AISD's alleged violation of the Open Meetings Act. Violation of Procedural Due Process Rights In support of their procedural due process complaints, appellees alleged that "on the Thursday prior to the Monday, June 19 meeting when notice of any school board meeting was required to be posted, the AISD administrative office told Firestone [Drive] residents via telephone that they were not on the agenda for the June 19 meeting. . . . None of the Firestone [Drive] residents had an inkling of the possible board action until the afternoon of June 19." The allegations also include that AISD's counsel had agreed to provide appellees' counsel with notice of any such agenda item but failed to do so, and that the wrong agenda was posted to the district's website. They asked for a declaratory judgment that "the action of the board on June 19 approving tuition is void because of due process infirmities." Appellees also alleged that their residence on Firestone Drive and the 1997 letter create a property right that is protected by the Texas Constitution and that the notice of the June 19, 2006 meeting "was insufficient to withstand due process scrutiny under the Texas Constitution." Procedural due process requires that a governmental entity's deprivation of life, liberty, or property, even if consistent with substantive due process, must "be implemented in a fair manner." United States v. Salerno, 481 U.S. 739, 746, 107 S. Ct. 2095, 2101, 95 L. Ed. 2d 697 (1987); City of Arlington v. Centerfolds, Inc., 232 S.W.3d 238, 248-49 (Tex.App.-Fort Worth 2007, no pet. h.). The first inquiry in any due process claim under the United States Constitution is whether the plaintiff has been deprived of a protected property or liberty interest. Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 59, 119 S. Ct. 977, 989, 143 L. Ed. 2d 130 (1999); Centerfolds, 232 S.W.3d at 248-49. Appellees claim that they have a property interest in their children's attending AISD without payment of tuition. Appellees admittedly do not live in the district. Section 25.001(b) of the education code provides that "[t]he board of trustees of a school district . . . shall admit into the public schools of the district free of tuition a person who is over five and younger than 21 years of age on the first day of September of the school year in which admission is sought if: . . . the person and either parent of the person reside in the school district." TEX. EDUC.CODE ANN. § 25.001(b)(1). Section 25.001(b) also provides that a school district shall admit certain other students who do not live in the district free of tuition, but none of *250 those other situations applies here. Id. § 25.001(b)(2)-(9). Accordingly, appellees do not have a statutory right to attend AISD schools free of charge. Neither do they have any property right as a result of the 1997 letter from Koonce to VanTrease. We have already concluded that even if the letter could be construed as an authorized, enforceable contract, it did not bind the district indefinitely. Moreover, estoppel cannot create a right that does not otherwise exist. Odessa Tex. Sheriff's Posse, 215 S.W.3d at 470; Dallas Cent. Appraisal Dist. v. GTE Directories Corp., 905 S.W.2d 318, 322 (Tex.App.-Dallas 1995, writ denied); see Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d 726, 734 (Tex.1981). Finally, we have already determined that there is no evidence that AISD failed to comply with the notice requirements of the Open Meetings Act. Appellees have cited no authority supporting their contention that they were entitled to any additional notice other than what was statutorily required. Accordingly, we conclude and hold that appellees did not offer evidence tending to show a probable right to recover on their claims because of a procedural due process violation by AISD. After reviewing the record in the light most favorable to the trial court's order and indulging every reasonable inference in its favor, we conclude that appellees failed to show a probable right to recover on the merits of any of their claims based on any of their alleged theories. Accordingly, under the prescribed standard of review, we must conclude that the trial court abused its discretion in entering the temporary injunction. We sustain AISD's first issue. Because we grant relief on AISD's first issue, we need not address its second and third issues.[25]See TEX.R.APP. P. 47.1; Teague v. City of Jacksboro, 190 S.W.3d 813, 821 n. 7 (Tex. App.-Fort Worth 2006, pet. denied). Appellee's Cross-Issue In one cross-issue, appellees contend that the trial court abused its discretion by failing to issue a temporary injunction enjoining AISD from interfering with appellees' pursuit of their appeal from DISD's denial of their detachment petition that is currently pending before the Texas Commissioner of Education. Because we have concluded that appellees did not introduce evidence tending to show a probable right to recover on any of their claims and, therefore, that they were not entitled to a temporary injunction, we overrule this issue. Conclusion Having sustained AISD's first issue and overruled appellees' cross-issue, we reverse and vacate the trial court's order granting a temporary injunction and remand the case to the trial court for further proceedings on the merits. NOTES [1] At oral argument, the parties informed this court that a hearing officer had issued a decision but that it was not yet final. The parties have not notified this court of any change in the status of that decision; thus we presume it is still pending and not yet final. Moreover, there is no such decision available yet on the Texas Commissioner of Education's website. See http://www.tea.state.tx.us /commissioner (last visited August 8, 2007). [2] Either the principal's or superintendent's office told her that all children living in Tour 18 were residents of the district. [3] On the 2005-06 school year enrollment forms, both the Zimmermans and the Wolfs listed their correct addresses on Firestone Drive and answered the question, "School District you reside in," with "Argyle." Janice testified that she did not know that her home was located in DISD rather than AISD until spring 2005 when she tried to vote in an AISD board election and was told she could not vote because she did not live in AISD. Vicki testified that she found out they paid taxes to DISD rather than AISD in 2004 after she first enrolled her children in AISD. [4] Janice testified that only "eight or ten" houses out of 125 on Firestone Drive were affected; however, for purposes of discussion, we will refer to the part of the street located in DISD as Firestone Drive, without differentiating between the part of the street that is located in DISD and the part that is located in AISD. [5] Pierce testified that Superintendent Pierel "asked if I [Pierce] could possibly draw up a petition requesting that we be annexed into the Argyle schools." However, Pierel testified that she did not ask Pierce to prepare the petition; instead, in response to Pierce's assertion that the residents of Firestone Drive had wanted to be in AISD "for many years," Pierel "told [Pierce] what the process was and that the district could not do this petition, that it would take the citizens to do the petition." [6] The resolution also provided that "residents that move to Firestone Drive after the adoption of this [r]esolution shall not be granted a transfer into" AISD. The resolution further stated that it was "conditioned upon Firestone Drive not being annexed into" AISD. [7] This accelerated appeal was argued to this court and submitted on January 30, 2007. We determined after oral argument that the parties' dispute was appropriate for referral to mediation. See TEX. CIV. PRAC. & REM.CODE ANN. § 154.021 (Vernon 2005). Accordingly, we ordered the parties to mediate the dispute within forty-five days to give them an opportunity to settle. On the parties' agreed motion, we extended the time to mediate until April 21, 2007. On April 23, 2007, the mediator informed this court that the parties were unable to settle. [8] This argument is based on a 1997 letter written by then superintendent Mickey Koonce to Gary VanTrease, the developer of the subdivision. We will discuss the letter in more detail below. [9] Appellees did not identify these "other statutes" in their petitions. [10] Jeffrey obtained a copy of the letter from AISD in 2006 pursuant to an open records request. [11] The first page is not included in the record. [12] Miriam Pierce testified that when she spoke with Superintendent Pierel about the complaint and about circulating a petition to the Firestone Drive residents, she told Pierel that she "believe[d] everyone on the board had been aware of that [that the children of Firestone Drive residents were allowed to go to AISD without paying taxes to the district]." According to Pierce, Pierel responded, "[Y]es, and we don't fault anyone on your street." However, even viewing this evidence in the light most favorable to the trial court's ruling, it is not evidence that Koonce's actions in writing the letter were authorized by the Board at that time or that the current Board had ratified the letter. See Willis v. Donnelly, 199 S.W.3d 262, 270 (Tex.2006) (holding that ratification could be based only on theory that party expressly agreed to be bound by agreement or retain the benefits of agreement); Miller v. Kennedy & Minshew, P.C., 142 S.W.3d 325, 342-43 (Tex.App.-Fort Worth 2003, pet. denied) ("A person ratifies an unauthorized act if, by word or conduct, with knowledge of all material facts, he confirms or recognizes the act as valid. Ratification may be inferred by a party's course of conduct and need not be shown by express word or deed.") (citation omitted). Even if this evidence of the Board's knowledge could be construed as a ratification, however, it does not change the nature of the language of the letter, which does not purport to bind AISD in perpetuity. See infra page 16-17. [13] AISD's counsel informed this court at oral argument that Koonce is deceased. [14] The supreme court mentioned the estoppel exception in Bowman v. Lumberton ISD, but decided the issues in that case under other "well recognized" exceptions to the general rule. 801 S.W.2d 883, 888 (Tex.1990) (op. on reh'g). Also, that case was a summary judgment case, in which the issue was whether the district established its defense as a matter of law. Id. at 884-85. [15] It appears from the record that the trial court may not have reached a review of the merits of appellees' underlying claims after determining that the exception to the general rule that governmental entities are not subject to estoppel is applicable here. After stating his determination that the exception to the general estoppel rule applied to AISD, the judge stated that "I'm not reaching the final merits of the case, but if [AISD] wins, then no longer will they [appellees] have the argument saying, well, can we just stay one more year so we can figure out where to go. Basically, they're on notice that you might need to start looking at other options." [Emphasis added.] However, to be entitled to a temporary injunction, a party must not only allege a cause of action (here, declaratory judgment and injunctive relief based on the theory that AISD was estopped from asserting that a valid, enforceable agreement did not exist), but also offer evidence tending to sustain that cause of action. Fox, 121 S.W.3d at 857; Miller Paper Co., 901 S.W.2d at 597; see also Dillard v. Austin ISD, 806 S.W.2d 589, 595 (Tex.App.-Austin 1991, writ denied) (op. on reh'g) (holding that a determination that the exception applies does not address the merits of an underlying claim, only whether an estoppel defense may be asserted against a governmental entity). [16] Although Jeffrey Wolf attended the June 19 meeting and knew the outcome of the Board's vote on the resolution, he testified at the temporary injunction hearing that he did not think that tuition would be charged until his appeal from DISD's denial of the detachment petition was resolved. He based his opinion on the conditional language in the resolution. [17] Appellees contend that the letter allows all children of Firestone Drive residents to attend AISD indefinitely as nontransfer students without paying tuition. [18] Although Superintendent Pierel's July 26, 2006 letter told appellees that all tuition must be paid in full before the beginning of the school year, she sent an email to Jeffrey Wolf stating that the tuition could "be broken down into two equal payments at the beginning of each semester." [19] AISD contends that any issue regarding the improper charging of tuition would be more properly brought before the Texas Commissioner of Education under section 7.057 of the education code, which provides that a person may appeal in writing to the commissioner if the person is aggrieved by: (1) the school laws of this state; or (2) actions or decisions of any school district board of trustees that violate: (A) the school laws of this state; or (B) a provision of a written employment contract between the school district and a school district employee, if a violation causes or would cause monetary harm to the employee. TEX. EDUC.CODE ANN. § 7.057 (Vernon 2006). [20] The trial court stated on the record that "there's some definite fact questions about what representations were made and when." [21] Because we decide that the exception would not be applicable in this case if we were to apply it, we need not decide whether the exception is limited solely to municipalities. [22] This policy states that "[t]he Board may waive tuition for a student upon written application by the student or parent or guardian, upon the recommendation of the Superintendent." [23] By no means do we intend to diminish the trial court's justifiable concerns regarding every child's education and its relative proximity to a child's residence, especially in the unique situation presented here where children on the same street end up in different school districts. [24] Jeffrey Wolf testified that Superintendent Pierel had told him that AISD would be willing to trade land with DISD so that DISD would be more willing to detach Firestone Drive. [25] These issues relate to whether appellees proved a probable, imminent, and irreparable injury pending the outcome of the suit and whether they are precluded from obtaining the equitable relief of an injunction because, by misrepresenting their status as residents of AISD, they have unclean hands.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1214597/	120 Ga. App. 25 (1969) 169 S.E.2d 369 WHITEHEAD v. SEYMOUR et al. 44512. Court of Appeals of Georgia. Submitted May 29, 1969. Decided July 2, 1969. 26 Telford, Wayne & Stewart, W. Woodrow Stewart, for appellant. Kenyon, Gunter, Hulsey & Sims, Julius M. Hulsey, for appellees. DEEN, Judge. 1. The court instructed the jury: "The burden of proof is on the plaintiff, Mr. Whitehead; and in order for him to obtain a verdict in his favor by you the burden is on him to prove by a preponderance of the evidence not only that the defendants were negligent in one or more of the ways set forth in the plaintiff's petition but also that such negligence by the defendants was the proximate cause of his damage, if any." He then stated: "In addition to the foregoing, the burden is also on the plaintiff to prove by a preponderance of the evidence that he could not have avoided the damage caused by the 27 defendants' negligence, if any, by the exercise of ordinary care on his part. In other words, before the plaintiff would be entitled to a verdict in his favor in this case, the burden is on him to prove by a preponderance of the evidence at least three things: first, that the defendants were negligent of at least one of the acts of negligence set forth in his petition; second, that such negligence by the defendants was the proximate cause of his damage, if any, and, third, that he could not have avoided such damage by the exercise of ordinary care on his part." The instruction was error because proof of ordinary care on the part of the plaintiff in discovering and avoiding the negligence of the defendant is no part of the plaintiff's case in chief. "It is insisted, however, that the plaintiff's husband, by the exercise of ordinary care and diligence upon his own part, could have avoided the consequences of the defendant's negligence, and for that reason the plaintiff could not recover. The burden of proof rests upon the defendant to establish this defense. Civil Code § 5160 [now Code § 38-103]; Falkner v. Behr, 75 Ga. 671; City Council of Augusta v. Hudson, 88 Ga. 599 (3); Ga. Midland R. Co. v. Evans, 87 Ga. 675." Williams v. Southern R. Co., 126 Ga. 710, 711 (55 SE 948). An instruction erroneously casting the burden of proof on the losing party as to a substantial issue in the case in usually reversible error. Cf. Morgan v. Automobile Financing, Inc., 180 Ga. 394 (2) (178 SE 721). In this case the defendant of course denied that the collision was due to any negligence on its part, and the court erred in charging that the plaintiff, if he proved such negligence, must go further and prove also that he could not have avoided its consequences, this being an affirmative defense. Purcell v. Hill, 111 Ga. App. 256 (141 SE2d 153); Jackson v. Merritt Hdw. Co., 26 Ga. App. 747, 749 (107 SE 394). 2. Interrogatories and depositions, being in lieu of testimony, should not be taken into the jury room. Shedden v. Stiles, 121 Ga. 637 (4) (49 SE 719); Royals v. State, 208 Ga. 78 (2) (65 SE2d 158). The rule does not apply to documents which, being under the best-evidence rule, are introduced as documents and not orally. It was not error to send out with the jury certain certified copies of city ordinances which had been admitted in evidence. 28 3. Where, as here, the defendants pleaded accident as one of their theories of defense, and the plaintiff's testimony was to the effect that his vehicle was in the middle of the freeway due to the unforeseen event of the windshield fogging up so that he could not see, and the evidence as a whole does not demand the finding that except for the negligence of some human agency the collision would not have occurred, it was proper to charge on this subject. Cobb v. Big Apple Supermarket of Columbus, 106 Ga. App. 790 (128 SE2d 536). 4. While there was testimony in this case from which a jury might have found that the plaintiff was injured due to a sudden emergency caused by forces over which he had no control, there was also evidence authorizing a verdict for the defendant on the ground that the plaintiff, when he found he could not see through his front windshield, might have taken immediate steps, by rolling down the window on his side of the vehicle, to avoid steering it into the center of the roadway and there coming to a stop, endangering not only himself but also following traffic. Assumption of risk, however, insofar as it applies to tort cases at all, goes beyond this and assumes that the actor, without coercion of circumstances, chooses a course of action with full knowledge of its danger and while exercising a free choice as to whether to engage in the act or not. "It is the situation in which one voluntarily takes the risk of a danger which is so obvious that he knows or must know of it, as in trying to beat a rapidly approaching train across the track, or in accompanying one who he knows is about to engage in a drag race, or in walking out onto a frozen pond where the ice is thin, etc." Yandle v. Alexander, 116 Ga. App. 165, 167 (156 SE2d 504). The plaintiff in this case cannot be said to have made a voluntary and knowing choice to stop in the middle of the freeway in such manner as to assume all risk of injury regardless of negligence on the part of any other person. It was accordingly error to give the defendant's requested charge on this subject. 5, 6. The remaining headnotes need no further elaboration. The seventh enumeration of error is not passed upon since the case will be tried again and the name of the witness referred 29 to in this excerpt from the charge can be ascertained in the meantime if plaintiff so desires and if it is in the possession of the defendant. Judgment reversed. Bell, P. J., and Eberhardt, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1832168/	845 So.2d 471 (2003) Saleh IBRAHIM and Samar Ibrahim (Individually and on Behalf of Their Minor Children, Mohammad Ibrahim, Ayah Ibrahim, and Habiba Ibrahim) v. Corey Leigh HAWKINS and State Farm Mutual Automobile Insurance Company. No. 2002 CA 0350. Court of Appeal of Louisiana, First Circuit. February 14, 2003. 474 Locke Meredith, Baton Rouge, for Plaintiffs-Appellees-Appellants Saleh Ibrahim, et al. Robert J. Burns, Jr., Atkinson, Perry, Atkinson & Balhoff, L.L.C., Baton Rouge, for Defendant-Appellant-Appellee Allstate Indemnity Company. Before: PARRO, McDONALD, CLAIBORNE,[1] JJ. PARRO, J. Allstate Indemnity Company (Allstate), which provided uninsured/underinsured motorist (UM) insurance coverage to Saleh Ibrahim, appeals a judgment finding it was arbitrary and capricious in its handling of his claim and imposing statutory penalties and attorney fees. Ibrahim answered the appeal, seeking additional attorney fees and legal interest. We amend and, as amended, affirm. FACTUAL AND PROCEDURAL BACKGROUND Ibrahim was injured in an automobile accident on February 4, 1999. On January 475 28, 2000, suit was filed against the driver of the other vehicle, Corey Leigh Hawkins, and his liability insurer, State Farm Mutual Automobile Insurance Company (State Farm). In a supplemental petition filed August 1, 2000, Ibrahim added his UM carrier, Allstate, claiming Hawkins was underinsured and seeking payment under his UM policy. Ibrahim claimed he had provided Allstate sufficient proof of loss, but it had arbitrarily, capriciously, and without probable cause refused to timely tender a reasonable amount under the UM coverage. He sought penalties and attorney fees from Allstate, pursuant to Louisiana Revised Statutes 22:658 and 22:1220. Ibrahim's policy with Allstate provided UM limits of $50,000 and medical payments coverage of $5,000; it was not an "economic-only" policy.[2] Ibrahim's most significant injuries were a broken rib and a right shoulder injury that eventually required arthroscopic surgery; he also lost time at work and underwent physical and psychological therapy. During the course of Ibrahim's medical treatments, Allstate tendered its $5,000 med-pay limit and eventually tendered another $29,569 in UM payments. State Farm paid its policy limits of $25,000, and the claims against it and Hawkins were dismissed. The case went to trial against Allstate for additional UM payments, penalties, and attorney fees. After trial, the court found Ibrahim had proven damages considerably in excess of his UM policy limits, as follows: Past Medical Expenses $ 31,750.22 Past Lost Wages 22,400.00 General Damages of Saleh Ibrahim Mental Anguish and Distress 10,000.00 Shoulder 50,000.00 Fractured Rib 10,000.00 Soft Tissue: 5,000.00 Loss of Consortium for Samar Ibrahim 5,000.00 Loss of Consortium for Children[3] 5,000.00 ____________ TOTAL $ 139,150.22 The court further found that this amount was subject to the following credits: State Farm Liability Limits 25,000.00 Allstate Med-Pay Tender made 4/24/00 5,000.00 Allstate UM Tender made 9/26/00 19,608.00 Allstate UM Tender made 3/09/01 9,961.00 ____________ TOTAL CREDITS $ 59,569.00 The judgment ordered Allstate to pay 476 Ibrahim $20,431, that being the remaining balance under its UM policy limits after deducting the above credits. The court also imposed penalties and attorney fees on Allstate, as follows: Penalties $ 40,862.00 Attorney Fees (1/3 of net judgment, $79,581.22) 26,527.07 ____________ TOTAL $ 67,389.07 The judgment further awarded legal interest on "said judgment" from the date of judicial demand, January 28, 2000, until paid; legal interest on the penalties and attorney fees from the date of the signed judgment, October 11, 2001; and all court costs. In this appeal, Allstate claims the court erred in finding it was arbitrary and capricious, in assessing statutory penalties, and in calculating attorney fees. Ibrahim answered the appeal, seeking additional attorney fees and court costs for the defense of the appeal, plus legal interest from date of judicial demand on the total proven damages in the amount of $139,150.22 until the time the full UM policy limits are paid. APPLICABLE LAW Louisiana Revised Statute 22:658 mandates the imposition of penalties and attorney fees when an insurer fails to pay its insured in accord with the statutory provisions. It provides, in pertinent part, as follows: A. (1) All insurers issuing any type of contract ... shall pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured or any party in interest. * * B. (1) Failure to make such payment within thirty days after receipt of such satisfactory written proofs and demand therefor, ... when such failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty, in addition to the amount of the loss, of ten percent damages on the amount found to be due from the insurer to the insured, or one thousand dollars, whichever is greater, payable to the insured,... together with all reasonable attorney fees for the prosecution and collection of such loss, or in the event a partial payment or tender has been made, ten percent of the difference between the amount paid or tendered and the amount found to be due and all reasonable attorney fees for the prosecution and collection of such amount. Louisiana Revised Statute 22:658 is a penal statute; as such, it must be strictly construed. Vaughn v. Franklin, 00-0291 (La.App. 1st Cir.3/28/01), 785 So.2d 79, 91, writ denied, 01-1551 (La.10/5/01), 798 So.2d 969. It subjects an insurer, when it is arbitrary or capricious in failing to unconditionally tender the undisputed amount within thirty days of satisfactory proof of loss, to the mandatory imposition of penalties and attorney fees for the collection of such amount. See Calogero v. Safeway Ins. Co. of Louisiana, 99-1625 (La.1/19/00), 753 So.2d 170, 174. A "satisfactory proof of loss" is that which is sufficient to fully apprise the insurer of the insured's claim. To establish a "satisfactory proof of loss," the insured must show that the insurer received sufficient facts to fully apprise the insurer (1) that the owner or operator of the other vehicle involved in the accident was uninsured or underinsured; (2) that he was at fault; and (3) that such fault gave rise to damages. 477 The information must also indicate the extent of those damages. See McDill v. Utica Mut. Ins. Co., 475 So.2d 1085, 1089 (La.1985); Fontana v. Louisiana Sheriffs' Auto. Risk Program, 96-2752 (La.App. 1st Cir.6/20/97), 697 So.2d 1037, 1039. When satisfactory proof of loss has been made and the insured has made a showing that the insurer will be liable for some general damages, the insurer must tender the reasonable amount that is due. McDill, 475 So.2d at 1091. This amount must be tendered unconditionally, not in settlement of the case, but to show good faith and the insurer's compliance with its contractual duties. The amount due is that amount over which reasonable minds could not differ. McDill, 475 So.2d at 1091-92. In determining an award of attorney fees to be assessed under LSA-R.S. 22:658, the trial court should consider the services needed to effect recovery, the degree of professional skill and ability exercised, the volume of work performed, the time devoted to the case, the result obtained, the amount in controversy, the novelty and difficulty of the questions involved, and the percentage fixed for attorney fees in the plaintiff's contract. Khaled v. Windham, 94-2171 (La.App. 1st Cir.6/23/95), 657 So.2d 672, 680, writ dismissed, 95-1914 (La.11/1/95), 661 So.2d 1369. The trial court must base its award of attorney fees on the attorney's efforts expended for "the prosecution and collection of the loss, that being the amount of any claim due the insured, rather than on the total recovery awarded. See Desoto v. Balbeisi, 02-0169 (La.App. 1st Cir.12/20/02), 837 So.2d 48, 52. The trial court's conclusion with respect to the assessment of penalties and attorney fees is, in part, a factual determination and should not be disturbed in the absence of a finding that it was manifestly erroneous. Bauer v. White, 532 So.2d 506, 509 (La. App. 1st Cir.1988). Another statute allowing a court to impose penalties for an insurer's failure to deal with its insured in good faith is LSA-R.S. 22:1220, which states, in pertinent part: A. An insurer ... owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. Any insurer who breaches these duties shall be liable for any damages sustained as a result of the breach. B. Any one of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer's duties imposed in Subsection A: * * (5) Failing to pay the amount of any claim due any person insured by the contract within sixty days after receipt of satisfactory proof of loss from the claimant when such failure is arbitrary, capricious, or without probable cause. C. In addition to any general or special damages to which a claimant is entitled for breach of the imposed duty, the claimant may be awarded penalties assessed against the insurer in an amount not to exceed two times the damages sustained or five thousand dollars, whichever is greater. Under this statute, when an insurer is found to have acted arbitrarily, capriciously, or without probable cause, the insurer shall be liable for damages sustained as a result of the breach, and may be assessed penalties not to exceed two times the damages sustained or five thousand dollars, whichever is greater. LSA-R.S. 478 22:1220(A) and (C); see Calogero, 753 So.2d at 173. There is a close relationship between the conduct described in LSA-R.S. 22:658(B)(1) and the conduct described in LSA-R.S. 22:1220(B)(5). See Theriot v. Midland Risk Ins. Co., 95-2895 (La.5/20/97), 694 So.2d 184, 192 n. 14. In fact, the conduct is virtually identical, i.e., failure to timely pay a claim after receiving satisfactory proof of loss when that failure to pay is arbitrary, capricious, or without probable cause. The primary difference is that under LSA-R.S. 22:658(A)(1) and (B)(1), the insurer must pay the claim within 30 days of receiving satisfactory proof of loss, rather than the longer 60-day period allowed under LSA-R.S. 22:1220(B)(5). See Calogero, 753 So.2d at 174. Where LSA-R.S. 22:1220 provides the greater penalty, it supersedes LSA-R.S. 22:658, such that the insured cannot recover penalties under both statutes. However, because LSA-R.S. 22:1220 does not provide for attorney fees, the insured is entitled to recover the greater penalties under its provisions and attorney fees under LSA-R.S. 22:658 for its insurer's arbitrary or capricious failure to timely pay his claim after receiving satisfactory proof of loss. See Calogero, 753 So.2d at 174. If an appellee appropriately requests an increase in attorney fees for the appeal, they are usually awarded, provided the appellant obtains no relief and the appeal has necessitated additional work on the part of appellee's counsel. See Loup v. Louisiana State School for the Deaf, 98-0329 (La.App. 1st Cir.2/19/99), 729 So.2d 689, 694. ANALYSIS The parties stipulated that Allstate was entitled to credit for the $25,000 State Farm payment of its liability limits and the $5,000 med-pay and $29,569 UM payments tendered by Allstate on September 26, 2000, and March 9, 2001.[4] Allstate does not contest the amount of the damages found by the trial court, but contends the court erred in finding its handling of Ibrahim's claim was arbitrary and capricious and in its computations of statutory penalties and attorney fees. Arbitrary and Capricious The evaluation of Allstate's handling of Ibrahim's claim is based on the timeliness and reasonableness of its actions. Therefore, the key facts relate to what it knew about his injuries and treatments, when it became aware of that information, and how it responded. The accident occurred February 4, 1999; Ibrahim was treated immediately at a hospital emergency room and sought followup treatment within a week from his personal physician, Dr. Donald Fonte, for continued pain in his neck, lower back, knee, chest, and right shoulder. An MRI at the end of February showed right shoulder impingement; an x-ray in late March showed a fracture of the 10th rib. Conservative treatment, including steroid injections, pain medications, and physical therapy, did not relieve his shoulder pain and limitation of motion, although his other problems resolved after several months. In July, Dr. Fonte referred Ibrahim to an orthopedist, Dr. Mark Field, who concluded that arthroscopic surgery on the right shoulder would be needed. He referred Ibrahim for additional physical therapy and, as of October 19, 1999, limited him to 479 light duty work requiring only one arm and with no mechanical lifting. All of this information is in Dr. Fonte's and Dr. Field's medical records. Suit was filed January 28, 2000. On March 28, 2000, Ibrahim's attorney sent a letter to Allstate with copies of Dr. Fonte's and Dr. Field's medical records and invoices for $6,386.72 in medical bills, plus Ibrahim's employer's verification of lost wages in the amount of $11,900. The letter outlined the treatments Ibrahim had received, described the recommended arthroscopic surgery, summarized the general damages and loss of consortium claims, and requested payment of the full UM policy limits. In a letter dated April 21, 2000, Allstate tendered its med-pay limit of $5,000 and stated, "we feel no UM tender is in order." At trial, Allstate's claims adjuster, Shirley Williams, testified that she gave no consideration to the loss of consortium claim and limited the lost wage claim to $5,250, which represented only the wages lost during the 15 weeks Dr. Fonte's notes specifically stated Ibrahim could not work at all. Although the employer's verification described Ibrahim's job duties as "cashier, stock man, manager, janitor," she did not correlate the work limitations imposed by Dr. Field with the employer's verification that Ibrahim had not worked from the accident date through June 1999, and had only worked 20 hours per week from August 1999 through February 2000.[5] In fact, she never did any further investigation of his wage loss claim. Allstate's claim file has a computerized assessment for general damages dated April 21, 2000; that print-out shows nothing for wage loss incurred or expected and nothing for expected medical specials, although both doctors were still treating Ibrahim. Ms. Williams testified that she provided the information for the computer assessment. On August 10, 2000, Ibrahim's attorney provided Allstate with a copy of the declarations page of the State Farm liability insurance policy covering Hawkins, a receipt and release showing State Farm had paid its policy limits of $25,000, and an affidavit from Hawkins stating he had no other liability insurance coverage. The letter again requested payment of the UM limits. On August 17, 2000, Ms. Williams requested additional medical records and stated, "Based on the records we have to date, we feel there is no UM exposure." On August 31, 2000, Ibrahim's attorney sent Allstate two letters. One enclosed a copy of the supplemental and amending petition that had been filed August 1, 2000, asserting Ibrahim's claim against Allstate. The second enclosed the medical records of Dr. Alan C. Farries, an orthopedist from whom Ibrahim had sought a second opinion; Dr. Farries confirmed the recommendation for arthroscopic surgery. The letter also included an estimate from Dr. Field that his fee and an assistant surgeon's fee for arthroscopic surgery would be $7,558. Upon receipt of this information, the computerized assessment was updated, and on September 22, 2000, Allstate tendered $19,608 to Ibrahim. Ms. Williams testified that this reflected the wage loss of $5,250, medical bills in the file of $6,800, the estimated surgeon's fee of $7,558, and general damages of $30,000. From this $49,608 estimate of Ibrahim's total damages, she deducted State Farm's $25,000 payment and Allstate's $5,000 480 med-pay payment, leaving $19,608. She acknowledged that she made no effort to estimate or include the anesthesiology or hospitalization costs that would necessarily accompany the surgical procedure. She also made no further adjustment for expected wage loss and did not increase the general damage estimate to reflect the anticipated surgery. Ibrahim had the arthroscopic surgery on November 29, 2000. On January 31, 2001, Ibrahim's attorney sent a letter to Allstate's attorney, enclosing copies of updated medical records and invoices from Dr. Field reflecting the surgery and follow-up medical treatment, including ongoing physical therapy. This letter suggested that increased medical expenses and additional lost wages due to the surgery justified payment of the full UM limits. It was forwarded to Allstate on February 14, and on March 3, 2001, Allstate tendered $9,961. Ms. Williams explained that this payment reflected an increase in general damages to $40,000, plus $14,319 for medical bills and $5,250 for lost wages, for a total of $59,569. After deducting the payments previously made by Allstate and State Farm, the balance was $9,961. Again, there was no increase in the wage loss estimate and nothing for loss of consortium or continuing treatment. Before going to trial, Ibrahim's attorney continued to provide additional information to Allstate. On April 9, 2001, he forwarded copies of additional medical records and bills incurred by Ibrahim; the paid medical expenses by this time totaled $21,845.60. In May, he forwarded treatment notes from Dr. Ashwin Sura, a psychiatrist who had treated Ibrahim for nervousness and depression from March 2000 through March 2001. Dr. Sura's notes from Ibrahim's first visit indicate the history of his present illness was: Accident 1 year ago"car"he was drivingtruck got in front of him. Froze up[;] gave him bags to breathe. He is changedgets upset over little thingsirritablenightmares @ nightarm is painfull (sic)afraid to drivewakes up in night hollersfeels nervous all the time. At the trial, Ms. Williams said she did not give any consideration to Dr. Sura's treatment or the cost of the medications she prescribed for Ibrahim, because the doctor's notes did not specifically say his mental condition was related to the accident. No additional tender was forthcoming from Allstate before the trial. In oral reasons for judgment, the trial court stated its conclusions concerning Allstate's handling of Ibrahim's claim for UM benefits under his policy, as follows: The court is extremely concerned that in the first tender the insurer was aware of the necessity of further surgery, and in fact even included a surgeon's cost, anticipated surgeon's cost therein, but did not increase the general damages associated with that, nor did they provide any amounts for the hospital or anesthetist fee. In providing the surgeon's cost they basically admitted that they understood and knew that the surgery was required. Failure to provide consideration for the other matters, the increased general damages, the hospital fees and anesthetist's fees was arbitrary and capricious on behalf of the insurer. No reasonable person could come to that decision without willfully attempting to deny the claim that proof of which had been presented to them. There was no consideration given as to any lost or reduced wages after May 24th of 1999. Upon examination by the plaintiff's counsel, it was definitively established that the $5,250.00 lost wages was only for the February 4, '99 through May 481 24, '99 period. Having recognized the need for surgery and failed to provide consideration for lost wages associated with the surgery, that was arbitrary and capricious on behalf of the insurer. Also with regard to the psychiatrist's costs, having already found that they are attributable to this matter, the documentation from the psychiatrist, I don't think any reasonable person could read that and not relate it directly to this accident. The notes are very clear. The doctor's notes are very clear. So failure to consider that, or give consideration to that in tendering is arbitrary and capricious.... Having reviewed the record, we conclude there was evidentiary support for the trial court's findings. Although all payments were made within thirty days from receipt of information, Allstate's estimates conveniently overlooked portions of that information, resulting in unreasonably low payments at each juncture. Moreover, despite receiving additional information regarding psychiatric treatment after its last tender, Allstate made no effort to adjust either its medical specials or general damages to account for Ibrahim's mental problems that were clearly attributable to the accident. Finally, throughout the evaluation process, Allstate totally ignored the claims of Ibrahim's wife and children. Accordingly, we find no manifest error in the trial court's conclusion that Allstate was arbitrary and capricious in its handling of Ibrahim's claim. Penalties The trial court imposed a penalty of twice the amount it found was owed to Ibrahim under the UM provisions of the Allstate policy after deducting all applicable credits. Allstate argues that under LSA-R.S. 22:658, this is clearly excessive, because that statute limits the penalty to 10% of the difference between the amount paid or tendered and the amount found to be due, which it suggests is $2,043.10. However, it is obvious that the court did not apply this statute, but looked to the provisions of LSA-R.S. 22:1220 in imposing this penalty. The allowable penalty under LSA-R.S. 22:1220 is two times the damages sustained as a result of the breach of specified duties or five thousand dollars, whichever is greater. Under the jurisprudence, where its provisions provide the greater penalty, it supersedes LSA-R.S. 22:658. See Calogero, 753 So.2d at 174. However, Allstate further argues that there was no showing of actual damages resulting from Allstate's breach of its duties, which is required in order to award penalties under LSA-R.S. 22:1220. We note that this court has consistently held that the penalty provision of LSA-R.S. 22:1220 is applicable only after a showing is made of actual damages resulting from the breach of the insurer's duties. See Champagne v. Hartford Cas. Ins. Group, 607 So.2d 752, 758 (La.App. 1st Cir.1992); Khaled, 657 So.2d at 679-680; Graves v. Businelle Towing Corp., 95-1999 (La.App. 1st Cir.4/30/96), 673 So.2d 311, 314-15; Carter v. Davis, 95-2198 (La.App. 1st Cir.5/10/96), 673 So.2d 362, 364-65, writ denied, 96-1449 (La.6/27/97), 696 So.2d 991; Reed v. Recard, 97-2250 (La.App. 1st Cir.11/18/98), 744 So.2d 13, 19, writ denied, 98-3070 (La.2/12/99), 738 So.2d 572; The Sultana Corp. v. Jewelers Mut. Ins. Co., 01-2059 (La.App. 1st Cir.12/31/02), 837 So.2d 134, 136. Ibrahim argues that even if there were no actual proven damages, this court should still award $5,000 per claimant under the penalty provision. This was the approach taken by the federal district court applying Louisiana law in Estate of Robichaux v. Jackson Nat'l Life Ins. Co., 821 F.Supp. 429, 431 (E.D.La.1993), and 482 the federal appellate court in In Matter of Hannover Corp. of America, 67 F.3d 70 (5th Cir.1995). It is also the interpretation followed by the Louisiana courts of appeal for the third, fourth, and fifth circuits. See Hall v. State Farm Mut. Auto. Ins. Co., 94-867 (La.App. 3rd Cir.5/31/95), 658 So.2d 204, 208; McClendon v. Economy Fire & Cas. Ins., Co., 98-1537 (La.App. 3rd Cir.4/7/99), 732 So.2d 727, 731; Rogers v. Commercial Union Ins. Co., 01-0443 (La.App. 3rd Cir.10/3/01), 796 So.2d 862, 869; Reed v. State Farm Mut. Auto. Ins. Co., 02-804 (La.App. 3rd Cir. 12/11/02), 832 So.2d 1132, 1135; Brinston v. Automotive Cas. Ins. Co., 96-1982 (La.App. 4th Cir.12/3/97), 703 So.2d 813, 817; and Genusa v. Robert, 98-449 (La.App. 5th Cir.10/14/98), 720 So.2d 166, 173. A move toward this approach has also been suggested in a dissenting opinion of this court. See The Sultana Corp., 837 So.2d at 137 (Fogg, J., dissenting)(suggesting that although the insured did not prove the actual amount of damages sustained due to the insurer's breach of its duty, the evidence showed there were actual damages and therefore, the $5,000 penalty provision should have been applied). Ibrahim's suggestion that we award $5,000 per claimant even if actual damages were not proved has been specifically considered and rejected by this court. In the Carter case, the sole issue presented on appeal was whether the trial court erred in awarding $5,000 in penalties for bad faith settlement practices under LSA-R.S. 22:1220. Carter, 673 So.2d at 363. In reversing the trial court's penalty award, this court reasoned: [W]e believe that the plain language of the statute dictates this result. A court's interpretation of a law should reflect the meaning the lawmaker intended. Furthermore, it is presumed that every word, sentence or provision in the law was intended to serve some useful purpose, that some effect is to be given to each such provision, and that no unnecessary words or provisions were used. The penalty provision clearly states, "[I]n addition to any general or special damages to which a claimant is entitled for breach of the imposed duty, the claimant may be awarded penalties...." (Emphasis supplied.) Giving meaning to each word of the statute, we believe that the lawmakers intended the penalty provisions in Section C of the statute to apply only in circumstances where the claimant has proven his entitlement to general or special damages. It is the plaintiff's burden to prove the damage he suffered as a result of defendant's fault, and to support an award there must be evidence in the record. The record herein reveals no evidence of damages suffered by the plaintiff as a result of the defendant's conduct. Under these circumstances the trial court erred in awarding plaintiffs penalties under LSA-R.S. 22:1220. Carter, 673 So.2d at 364-65 (citations omitted); see also The Sultana Corp., 837 So.2d at 135-36. Therefore, until the Louisiana Supreme Court addresses and resolves this split in the decisions of the appellate courts of this state, we must follow the jurisprudence from this circuit that does not allow any penalty under LSA-R.S. 22:1220 unless the insured has proven damages were suffered as a direct result of the insurance company's conduct. See Graves, 673 So.2d at 315. The evidence in this case does not establish such damages. Therefore, the trial court's award of penalties in the amount of $40,862 under the provisions of LSA-R.S. 22:1220 was legal error and cannot be maintained. However, a penalty award pursuant to LSA-R.S. 22:658 is appropriate; 483 Allstate has computed this as $2,043.10, which is 10% of the remaining amount within Allstate's policy limits after deducting the payments already made by it and State Farm. In considering whether this is a correct computation, we have examined the current and past versions of LSA-R.S. 22:658 and the jurisprudence interpreting it. When the insurer has made partial payments toward its obligation, the statute calls for a penalty of "ten percent of the difference between the amount paid or tendered and the amount found to be due...." This language has remained consistent through several amendments. In Malbrough v. Wallace, 594 So.2d 428, 437 (La.App. 1st Cir.1991), writ denied, 596 So.2d 196 (La.1992), this court defined the "amount found to be due" as plaintiff's total damages less the liability insurer's policy limits.[6] However, that case was decided before the amendment of LSA-R.S. 22:658 in 1992. See 1992 La. Acts, No. 879, § 1. Before that amendment, the applicable penalty in Malbrough for the arbitrary or capricious failure to make any payment to the insured within thirty days after receipt of satisfactory proof of loss was, in addition to the amount of the loss, "ten percent damages on the total amount of the loss ...." (emphasis added). The 1992 amendment modified this portion of the penalty to state that, in addition to the amount of the loss, the penalty would be "ten percent damages on the amount found to be due from the insurer to the insured ...." (emphasis added). This amendment clarified that ten percent of "the amount found to be due from the insurer to the insured," rather than ten percent of "the total amount of the loss," was the maximum penalty that could be imposed on an insurer for its failure to make any payment in accordance with the statutory requirements. Reading this amended provision in pari materia with the penalty provision for the situation in which a partial payment has been made, we conclude that "the amount found to be due" can no longer be measured by the total damages minus the liability insurance payment, as in Malbrough.[7] Under the then-applicable version of the statute, that computation was correctly based on the total amount of the loss, which mirrored the first portion of the penalty provision at that time. Under the current version, however, we conclude that "the amount found to be due" must mirror the amended first portion of the penalty provision and be based on the amount that is ultimately found to be owed by the insurer to the insured. In this case, after considering the Allstate policy limits and deducting all payments made by it and State Farm, the "amount found to be due" by the trial court was $20,431. Basing the ten percent penalty on this amount, Allstate is thus liable to Ibrahim for a penalty of $2,043.10. Attorney Fees The trial court awarded attorney fees in the amount of $26,527.07, which represented one-third of the net judgment of $79,581.22. The court stated that this award was based on the contingency fee contract showing a one-third fee, which the court found "to be a reasonable and traditional fee for this type of matter." Allstate contends the trial court erred in 484 awarding attorney fees that are out of proportion to the amount of the statutorily permissible award and cannot fairly be attributed to "the prosecution and collection of such amount," as the statute requires. Having reduced the penalty award, we must re-evaluate the attorney fee award using the factors set out in the jurisprudence. See Degruise v. Houma Courier Newspaper Corp., 95-1863 (La.11/25/96), 683 So.2d 689, 694-95. The award must be based on the attorney's efforts expended for the prosecution and collection of the claim against the insurer and the penalty due to the insured, taking into consideration the services needed to effect recovery, the degree of professional skill and ability exercised, the volume of work performed, the time devoted to the case, the result obtained, the novelty and difficulty of the questions involved, and the percentage fixed for attorney fees in the plaintiff's contract. See Desoto, 837 So.2d at 51-52. The record in this case indicates that State Farm's liability was established from the outset. The accident report is one of the first items in the Allstate claim file; it shows Hawkins caused the accident by turning left directly in front of Ibrahim, leaving him no opportunity to avoid the collision. The claim file also reflects Allstate knew the State Farm policy had a $25,000 liability limit. Therefore, Allstate knew that its insured had no liability and that State Farm's contribution would be limited to $25,000. By August 2, 2000, State Farm had paid its policy limits and was released from the litigation. The only pleadings in the record before that date are the petition, State Farm's answer, and the supplemental and amending petition naming Allstate as an additional defendant. Based on the record, including the correspondence and documents in Allstate's claim file, it is clear that virtually all of the work done by Ibrahim's attorney in this case was expended to recover the UM payments that were contractually owed to his client. There was nothing novel or unusual about the factual or legal basis of the claim, just an inordinate amount of time and effort to obtain what Allstate should have paid its insured. Dr. Field was deposed twice, once in October 2000 and again after the surgery in May 2001; additional discovery was propounded in preparation for trial when Allstate failed to make any additional tender after receipt of Dr. Sura's reports. The record reflects that Ibrahim's attorney was zealous, competent, and well-prepared in his representation of his client. Solely as a result of those efforts, which spanned almost two years, Ibrahim recovered the full policy limits due under his UM contract, plus statutory penalties and attorney fees. Having determined that when a partial payment has been made, "the amount found to be due" must be based on the amount that is ultimately found to be owed by the insurer to the insured, we further note that the insurer shall be subject to "all reasonable attorney fees for the prosecution and collection of such amount." (emphasis added). See LSA-R.S. 22:658(B)(1). In this case, such amount" is equal to the total recovery against Allstate, or $22,474.10, including the revised penalty. Therefore, the trial court's award of one-third of the net judgment, which resulted in an attorney fee of $26,527.07, exceeds the total recovery and is clearly excessive. Based on our recalculation of the total recovery and approximating the contingency fee reflected in Ibrahim's contract with his attorney, we believe an attorney fee award of $7,500 is appropriate. The judgment will be amended accordingly. Legal Interest The judgment ordered Allstate to pay the remaining balance under its policy 485 after deduction of the tenders it had already made, that being $20,431, and to pay legal interest on "said judgment" from the date of judicial demand, January 28, 2000, until paid.[8] Ibrahim contends that legal interest should be computed and paid on the total damages of $139,150 from the date of judicial demand until Allstate exhausts its policy limits of $50,000, citing Martin v. Champion Ins. Co., 95-0030 (La.6/30/95), 656 So.2d 991, in support of this argument. There the Louisiana Supreme Court held that the UM insurer's obligation to pay judicial interest on the amount of the judgment in excess of its policy limits was the same as its responsibility for such interest under its liability coverage, and awarded legal interest on the entire judgment, less the amount paid by the liability insurer, from the date of judicial demand. However, that decision was based on the supplementary payment provision in the liability portion of the insurance policy, which the court concluded must also be applicable to the UM portion of the policy under the statutory mandate of LSA-R.S. 22:1406. The record in this case does not contain a copy of the Allstate policy, so we are unable to ascertain whether the supplemental payment provision in the liability portion of the policy would mandate a similar result. However, although the record contains insufficient information to justify an award of legal interest on the entire amount of the damages, we believe the trial court erred in awarding legal interest from the date of judicial demand on only the difference between the amount ultimately tendered by Allstate and its policy limits. Just as the insurer's liability for the principal amount of the judgment is restricted to its policy limits, its responsibility for judicial interest from the date of judicial demand should also be measured by its policy limits, which is the principal amount owed to its insured. Allstate was obligated to Ibrahim for its full UM limits of $50,000 plus its med-pay limits of $5,000. It made no payments until after suit was filed. Therefore, Allstate is liable for legal interest on $55,000 from the date of judicial demand until its first tender of $5,000 on April 24, 2000. Legal interest on $50,000 is due from April 25, 2000, until the next tender of $19,608 on September 26, 2000. Legal interest on $30,392 is due from September 27, 2000, until March 9, 2001, when Allstate made its final tender of $9,961. Legal interest is due on the balance of $20,431 from March 10, 2001, until paid in full.[9] Because Allstate has obtained relief on the appeal, we do not award additional attorney fees to Ibrahim for the appeal. See Guidry v. Millers Cas. Ins. Co., 01-0001 (La.App. 1st Cir.6/21/02), 822 So.2d 675, 684. CONCLUSION We amend the judgment in favor of Ibrahim and against Allstate to award a penalty in the amount of $2,043.10 and attorney fees in the amount of $7,500. The judgment is further amended to bear legal interest on $55,000 from judicial demand *486 until April 24, 2000; on $50,000 from April 25, 2000, until September 26, 2000; on $30,392 from September 27, 2000, until March 9, 2001; and on the balance of $20,431 from March 10, 2001, until paid in full. In all other respects, the judgment is affirmed. Each party is to bear its own costs for this appeal. AMENDED AND AS AMENDED, AFFIRMED. NOTES [1] Judge Ian W. Claiborne, retired from the Eighteenth Judicial District Court, is serving as judge pro tempore by special appointment of the Louisiana Supreme Court. [2] Under LSA-R.S. 22:1406(D)(1)(a)(i), an insured can select UM coverage limited to actual economic losses, with no coverage for noneconomic damages like pain, suffering, inconvenience, and mental anguish. Ibrahim's policy was not limited to economic-only damages. [3] Although the petition names only three children, Ibrahim and his wife had a fourth child while this matter was pending. The petition was not amended to include the fourth child, but the judgment does not enumerate the children among whom the loss of consortium award is to be divided. The appeal does not question this award. [4] Although the letters in which the tenders were made were generally several days earlier, the judgment uses these stipulated dates as the dates for the Allstate UM tenders. We will adhere to the dates of the trial court judgment for these payments and the med-pay payment, which is shown as April 24, 2000. [5] Although later correspondence in the claim file and Ms. Williams' trial testimony suggests the wage verification form was not received until some later date, our examination of the file reveals that she did have this information. Furthermore, without this wage verification from Ibrahim's employer, she could not have known how much to include for the 15 weeks of lost wages she conceded was established. [6] Malbrough was the only case we could find from this circuit or the supreme court to specifically address the computation of the penalty under this portion of LSA-R.S. 22:658. [7] Support for this conclusion concerning the Malbrough computation of damages is found in the comments of W. Shelby McKenzie and H. Alston Johnson, Insurance, Recent Developments in the Law 1991-1992, 53 La. L.Rev. 809, 815 (1993). [8] This is the day suit was filed against Hawkins and State Farm. In Burton v. Foret, 498 So.2d 706, 712-13 (La.1986), the Louisiana Supreme Court noted that legal interest runs from the plaintiff's first judicial claim against any party responsible for a single tortious act. Thus, the UM insurer was liable for legal interest from the date of judicial demand against the negligent motorist, even if the UM carrier was not joined as a defendant until a later date. See LSA-R.S. 13:4203. [9] The trial court correctly awarded legal interest on the penalties and attorney fees from the date of the signed judgment. See Sharbono v. Steve Lang & Son Loggers, 97-0110 (La.7/1/97), 696 So.2d 1382. 1388-89.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1253444/	362 S.C. 373 (2005) 608 S.E.2d 422 The STATE, Respondent, v. David F. SULLIVAN, Appellant. No. 25923. Supreme Court of South Carolina. Heard December 2, 2004. Decided January 10, 2005. Rehearing Denied February 17, 2005. 374 Assistant Appellate Defender Aileen P. Clare, of Columbia, for Appellant. Attorney General Henry Dargan McMaster, Chief Deputy Attorney General John W. McIntosh, Assistant Deputy Attorney General Salley W. Elliott, Senior Assistant Attorney General Norman Mark Rapoport, all of Columbia, and Harold W. Gowdy, III, of Spartanburg, for Respondent. Justice PLEICONES: Appellant was convicted of criminal domestic violence of a high and aggravated nature (CDVHAN) and sentenced to ten years imprisonment. We certified the case for review under Rule 204(b), SCACR. We affirm. FACTS Appellant was indicted for CDVHAN. The aggravating circumstances alleged were infliction of serious bodily injury, difference in gender, great disparity in the ages or physical conditions of the parties, and purposeful infliction of shame and disgrace. Prior to voir dire, Appellant moved the circuit court to strike "purposeful infliction of shame and disgrace," claiming the phrase was unconstitutionally vague in that it failed to 375 provide notice of the particular conduct to be avoided in order to stay within the bounds of the law. The court denied the motion. The case went to trial, and Appellant was convicted. Before sentencing, Appellant moved for a new trial, again claiming vagueness. The court denied this motion as well. On appeal, Appellant claims he is entitled to a new trial because there is a reasonable doubt that he would have been convicted of CDVHAN[1] had the jury not been charged as to "purposeful infliction of shame and disgrace." In support of his vagueness claim, Appellant asserts "shame" and "disgrace" lack clear meaning. In addition, Appellant asserts there is no standard by which to determine the existence of a purposeful infliction. ISSUE Whether "purposeful infliction of shame and disgrace" is unconstitutionally vague. ANALYSIS A person is guilty of CDVHAN if he or she commits criminal domestic violence[2] and "the elements of assault and battery of a high and aggravated nature [ABHAN] are present." S.C.Code Ann. § 16-25-65 (2003).[3] ABHAN is "an *376 unlawful act of violent injury" accompanied by a circumstance of aggravation. State v. Primus, 349 S.C. 576, 580, 564 S.E.2d 103, 105 (2002). Circumstances of aggravation include: use of a deadly weapon; intent to commit a felony; infliction of serious bodily injury; great disparity in the ages or physical conditions of the parties; difference in gender; purposeful infliction of shame and disgrace; taking indecent liberties or familiarities with a female; and resistance to lawful authority. Primus, 349 S.C. at 580-81, 564 S.E.2d at 105-06. Regarding vagueness, the due-process[4] standard is whether the statute "either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application." Connally v. Gen. Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322, 328 (1926); see also State v. Michau, 355 S.C. 73, 75-78, 583 S.E.2d 756, 758-59 (2003) (applying the principle). We disagree with Appellant that the CDVHAN statute violates due process. "Shame" and "disgrace" are common terms, so a person of common intelligence need not guess at the meanings. Likewise, a person of common intelligence understands what "purposeful infliction" means. Consequently, "purposeful infliction of shame and disgrace" does not offend due process. Appellant's conviction is AFFIRMED. TOAL, C.J., MOORE, WALLER and BURNETT, JJ., concur. NOTES [1] On appeal Appellant does not deny that criminal domestic violence occurred. [2] Criminal domestic violence is "caus[ing] physical harm or injury to a person's own household member" or "offer[ing] or attempt[ing] to cause physical harm or injury to a person's own household member with apparent present ability under circumstances reasonably creating fear of imminent peril." S.C.Code Ann. § 16-25-20(A) (2003 and Supp.2003). The legislature's 2003 amendments to section 16-25-20 did not redefine criminal domestic violence. See 2003 Act No. 92, § 3 (effective January 1, 2004). [3] In 2003 the legislature substantially amended section 16-25-65, redefining CDVHAN. 2003 Act No. 92, § 3 (effective January 1, 2004); see also S.C.Code Ann. § 16-25-65(A) (Supp.2003). The version in effect from 1994 through 2003 applies to this case. See S.C.Code Ann. § 16-25-65(A) (2003). [4] U.S. Const. amend. XIV, § 1; S.C. Const. art. I, § 3.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1479426/	134 F.2d 931 (1943) STEINER v. UNITED STATES. No. 10370. Circuit Court of Appeals, Fifth Circuit. March 29, 1943. Rehearing Denied April 24, 1943. 932 Saul Stone and Warren O. Coleman, both of New Orleans, La., for appellant. Herbert W. Christenberry, U. S. Atty., of New Orleans, La., for appellee. Before HUTCHESON, HOLMES, and McCORD, Circuit Judges. 933 McCORD, Circuit Judge. Arthur A. Steiner, Esther E. Stein, and James R. Stewart were tried, convicted, and sentenced under five counts of a six-count indictment which charged them with use of the mails in furtherance of a scheme to defraud, in violation of Section 215 of the Criminal Code, 18 U.S.C.A. § 338. Steiner alone has appealed. The indictment charges and the proof shows that Steiner, Stein, and Stewart evolved and put into practice a scheme to procure fraudulent reductions of tax assessments on real and personal property in the City of New Orleans, Louisiana. Steiner, a lawyer, solicited and secured taxpayer clients, agreeing for a fee to secure a tax assessment reduction from the Louisiana Tax Commission. Stewart, chief clerk in the New Orleans office of the Tax Commission, by virtue of his position of trust and confidence, had the client's assessment reduced on the tax rolls and approved by the Commission. Thereafter the taxpayer paid the taxes on the basis of the fraudulently reduced assessment, and from month to month and day to day the monies so paid were covered into the public treasuries. Stein acted as go-between for Steiner and Stewart. The partners agreed to divide the proceeds of their nefarious scheme. Steiner charged clients a fee of usually one-half of the tax savings, and it was agreed that upon collection of such fees Steiner was to get one-fourth, Stein one-fourth, and Stewart one-half. On occasion letters were written by Steiner for the purpose of collecting fees from clients, and it is shown that Stein had statement forms printed bearing the heading "Steiner and Stein"; that such forms were used to send statements to clients; and that the forms were furnished to Stewart who mailed them to clients when he had fraudulently procured the agreed assessment reductions. By this scheme a fraud of the most reprehensible kind was perpetrated upon the State of Louisiana, its agencies, and taxpayers, in that assessments were reduced unfairly, inequitably, and fraudulently, thereby preventing collection of the full amount of taxes rightfully due. The evidence is without dispute that Steiner and his partners defrauded the State and its taxpayers out of many thousands of dollars; that theirs was a continuous and continuing scheme whereby they reaped a rich harvest of unlawful gain not only for one year, but in many cases from year to year; and that after paying taxes for one year taxpayers would find their assessments for the new year raised, and the partners would again have the assessments fraudulently reduced, and send out bills and receive payments. With Stewart working in the Tax Commission office as chief clerk and being in charge of tax estimates and settlements and fully trusted by the Tax Commissioners, the fraudulent scheme might have indefinitely would its way through devious trails of corruption and fraud; but Steiner, having once embarked on the crime way, could not bring himself to divide the spoils as he had agreed to do. It was only one more step for him to steal from his confederates, and when he did, they commenced to complain and then to threaten him for their part of the monies which he had withheld. Cornered and trapped by his dissatisfied confederates, and facing detection and disgrace, Steiner thereupon sought out an officer of the Louisiana Bar Association and attempted to gain immunity for himself by turning informer against his partners and others whom he named and alleged were engaged in the unlawful "tax racket". That the mails of the United States were used in furtherance of the scheme cannot, we think, be doubted. The scheme was a continuous one in which these partners in crime worked hand-in-glove to defeat the collection of lawful taxes. The mailing of letters and statements to clients for the collection of fees was a necessary, indeed indispensable, element of that scheme, for without money to bribe Stewart and divide with Stein and Steiner the partnership would have failed. The continuity of the scheme is shown by evidence that clients who withdrew their patronage had their assessments raised. There is no dispute but that tax payments were made after entry of the fraudulent assessment reductions on the tax books. Moreover, if the fees were not paid by clients it reasonably follows that Stewart, who worked the fraud to get the assessments reduced, could use his place and position to get them raised again. In one instance where a client thought a reduction from approximately $140,000.00 to $40,000.00 was too much and declined to accept Steiner's services in the matter, the assessment was caused by the partner Stewart to be raised to in excess of $80,00.00, an amount acceptable to the taxpayer. Lane Cotton Mills which dispensed with these most successful reduction services 934 after using them for several years found that upon dismissal of Steiner its assessments soared even higher than before. Appellant contends that the scheme to defraud the State and its taxpayers was consummated at the instant the illegal tax assessment reductions were entered on the books of the Tax Commission; and that the mails were used after the execution of the scheme and in connection with matters wholly outside the scheme to defraud. Cf. McNear v. United States, 10 Cir., 60 F.2d 861; Dyhre v. Hudspeth, 10 Cir., 106 F.2d 286; Spillers v. United States, 5 Cir., 47 F.2d 893; Stapp v. United States, 5 Cir., 120 F.2d 898. The case at bar is not controlled by those decisions, for here the scheme to defraud had not come to an end when the mails were used. Unless money came in, the scheme would not and could not operate, for Stewart, the keyman with access to the tax rolls, Steiner, the soliciting lawyer, and Stein, the go-between, were all in the scheme for what they could get out of it. The collection of fees for "services rendered" was an integral part of the continuous and operating scheme to defraud, and the mails were used to accomplish their collection. When one of the schemers used the mails for collection of fees in furtherance of the fraudulent scheme, all defendants being partners in crime, were responsible for the mailing. Tincher v. United States, 4 Cir., 11 F.2d 18; Hart v. United States, 5 Cir., 112 F.2d 128. Under Section 215 of the Criminal Code, the mail fraud statute, it is sufficient to charge and prove that there was a scheme to defraud; that the mails were used or caused to be used in furtherance of the scheme; and that the scheme was one which "reasonably contemplated the use of the mails". A careful review of the evidence in this rather lengthy record discloses that the government proved the essential elements of the offenses charged, and that there was no fatal variance between the charges and the proof. Spivey v. United States, 5 Cir., 109 F.2d 181; Corbett v. United States, 8 Cir., 89 F.2d 124; Guardalibini v. United States, 5 Cir., 128 F.2d 984; United States v. Lowe, 7 Cir., 115 F. 2d 596; Hart v. United States, supra. Steiner attacks the sufficiency of the evidence to show the mailings alleged in the first two counts of the indictment, and further alleges that for purposes of venue there was no proof that the letter in the second count was mailed in New Orleans. The statement forming the basis of the first count was introduced in evidence. It was on the billhead of "Steiner and Stein", and was addressed to Longino & Collins, 3801 Tulane Avenue, New Orleans, La. The witness R. K. Longino produced the letter from his files, and testified that the statement was found with the stamped and postmarked envelope pinned to it. The bill bore date of December 31, 1938, and the envelope bore a postmark dated January 4, 1939. The witness Hugh M. Wilkinson, to whom Steiner had revealed the details of the scheme, and who had discussed a similar statement with Steiner, testified that Steiner had said that when a customer failed to pay the agreed fee, "Stewart himself would mail this bill on the billhead of Steiner and Stein * ." The collection letter forming the basis of the second count was written to Intertype Corporation, 360 Furman Street, Brooklyn, New York. The letter was typed for Steiner by his secretary; it requested payment of the account "by return mail". The letter bore date of February 12, 1938, and was received in the New York office of Intertype two days later on February 14, 1938. An officer and an employee of Intertype Corporation testified to the manner of handling mail in the New York office, and that this letter was received by Intertype Corporation in due course through the mail. Although circumstantial in character, the proof concerning the mailing of the billhead and letter was sufficient to warrant submission of the question of mailing to the jury, and to establish that the letter to Intertype Corporation was in fact mailed at New Orleans. Cf. Corbett v. United States, 8 Cir., 89 F.2d 124; United States v. Baker, 2 Cir., 50 F.2d 122. No contention is urged concerning the sufficiency of proof of the mailings charged in counts 4, 5 and 6 of the indictment. It is contended that the testimony of the witness Hugh M. Wilkinson should have been excluded as being based on statements made to him by Steiner at a time when the relationship of attorney and client existed, and that, therefore, such statements were privileged and inadmissible. When the objection was made below, the jury was retired and the court proceeded to hear evidence bearing upon the relationship existing between Steiner and Wilkinson at the time the statements were made. The evidence 935 was in sharp conflict: Steiner saying that he consulted Wilkinson as an attorney, and Wilkinson saying that there was no attorney and client relationship. Wilkinson testified that he was a member of the Board of Governors of the Louisiana Bar Association; that Steiner came to him and told him that he was involved in trouble and wanted to resign from the practice of law; and that Steiner revealed the tax reduction scheme in detail. Having heard the testimony of Steiner, Wilkinson, and other witnesses, the trial court found that the relationship of attorney and client had not been shown and that the evidence definitely established that no such relationship existed between Steiner and Wilkinson at any time. Accordingly, Wilkinson was allowed to testify. The fact that one is a lawyer does not disqualify him as a witness, for he, like any other person, may testify to any competent facts except those which came to his knowledge by means of confidential relations with his client. The existence of that relationship is a question of fact to be inquired into by the court preliminary to the admission or rejection of the proffered testimony. Here the preliminary inquiry was properly conducted and there was no error in the court's ruling allowing Wilkinson to testify. Smale v. United States, 7 Cir., 3 F.2d 101; Underhill's Criminal Evidence, 4th Ed., §§ 333, 334, 335; Wharton's Criminal Evidence, 10th Ed., § 497; Wigmore on Evidence, 3rd Ed., Vol. VIII, § 322, pp. 626-7. There is no merit in the contention that the statements made by Steiner to Wilkinson constituted an involuntary confession made as a result of "promises, inducements, and hopes of reward". Wilkinson merely offered to lend his personal influence to secure leniency for Steiner. Wilkinson was not a law enforcement officer. Steiner was not in custody or under arrest, and no force, coercion, or duress was used to procure the statements. The statements were voluntarily made and were admissible in evidence. Furthermore, the court did not abuse its discretion in restricting cross-examination of Wilkinson regarding political matters. Steiner further contends that he was denied the right of public trial in that legal matters with reference to the conduct of the trial were argued by government and defense counsel "in sotto voce at the bench in full view of the jury, but out of hearing of the defendant and the public". At the beginning of the trial the judge announced that the jury would be retired only in the event of extended argument on legal matters, and that other arguments on objections would be made by counsel at the bench. No objection was interposed by counsel to this practice. As the trial progressed numerous brief arguments were had at the bench out of hearing of the jury. Steiner's counsel participated in many of the conferences, and Steiner was always present in the court room when such conferences were held. Neither he nor his counsel complained or made objection at any time to the practice, and we think it clear that he was in no wise prejudiced. Both he and his counsel were satisfied with the procedure at the trial, and the assignment of error and the contention on the point seems to be nothing more than an afterthought by which fair conduct, in which they acquiesced and participated, is sought to be distorted into impropriety and alleged prejudicial error. The assignment is wholly without merit. See Johnson v. United States, 63 S.Ct. 549, 87 L.Ed. ___, decided February 15, 1943. Complaint is made of the fact that the trial judge questioned certain witnesses during the trial. Many of the questions propounded by him were helpful in developing the facts of the case. He showed no partiality in his questioning and did not assume the role of prosecutor, a practice condemned in Adler v. United States, 5 Cir., 182 F. 464; cf. Moore v. United States, 5 Cir., 123 F.2d 207. At times the court's questions were helpful in bringing forth answers altogether favorable to Steiner and his co-defendants. In fact, the questions propounded did much to develop facts which led to exclusion of certain evidence and the consequent abandonment and withdrawal of the third count of the indictment. Moreover, the court was careful to instruct the jury that they were the sole judges of the facts, and that they were not to infer from his questioning that he had views one way or the other concerning the guilt or innocence of the defendants. The questioning of witnesses by the court did not constitute error. Moore v. United States, 5 Cir., 132 F.2d 47; United States v. Lee, 7 Cir., 107 F.2d 522. The evidence made a case for the jury, and the court properly refused to grant the motion for a directed verdict. After a careful review of the record we 936 find no reversible error in the rulings of the court as to the admission or exclusion of evidence, including admission of duly authenticated photostatic copies of income tax returns. In the charge the court fully and fairly stated the law applicable to the case, and with care and prudence cautioned the jury not to be influenced by the fact that the defendants, as they had a constitutional right to do, elected not to take the stand to testify in their own behalf. No reversible error appears and the verdict is supported by the evidence. The judgment is affirmed. HUTCHESON, Circuit Judge (specially concurring). I agree with my associates that the record leaves in no doubt that appellant and his confederates did, as the indictment charges, devise a scheme to defraud, "the State of Louisiana, the City of New Orleans, the Orleans Parish School Board, the Board of Commissioners of the Orleans Levee District, and Agencies of the State of Louisiana and of the City of New Orleans, and the taxpayers of the State of Louisiana and of the City of New Orleans". I agree with them, too, that the evidence supports the finding that the indictment letters were mailed as charged, that it was not error to receive Wilkinson's testimony, that there was no prejudicial error in the complained of conduct of the trial judge, and that if the mails of the United States were used for the furtherance of the scheme, the judgment should be affirmed. Appellant, reads the indictment as not including within those to be defrauded by the scheme the taxpayers to whom the bills were sent. He argues that under the rule applied, in Stapp v. United States, 5 Cir., 120 F.2d 898, and Spillers v. United States, 5 Cir., 47 F.2d 893, to reverse, and in Hart v. United States, 5 Cir., 112 F.2d 128, to affirm, a conviction, the bills mailed to the clients after the reductions had been secured were not mailed in furtherance of the scheme because, a scheme to defraud the taxing agencies alone, it had already been consummated. I cannot agree with this reading of the indictment. I think it clear that "the taxpayers of the State of Louisiana and of the City of New Orleans", alleged in the indictment as victims of the scheme, were the taxpayer clients, victimized by paying for fraudulent services which they had been led to believe were to be honest and faithful services. A reading of the indictment on page 5 of the record leaves this in no doubt. It is there alleged that the "said defendants * * would pretend and represent that they were engaged in the legitimate business of procuring and obtaining for taxpayers reductions in their tax assessments on real and personal property on the official tax record * * * which said assessments the said defendants * * * would pretend, represent and claim to the said taxpayers were erroneous, excessive and improper; that they would approach and solicit taxpayers to whom they would represent, pretend and claim that they would appear before the Louisiana Tax Commission as the authorized representatives of said taxpayers for the purpose of establishing and obtaining fair assessments on the real and personal property of said taxpayers, * * * that it was a part of said scheme and artifice to defraud, that the defendants * * * would pretend to taxpayers whom they would solicit and approach that they would employ only legitimate and honest means in effecting such reductions in assessments; that the defendants * * * would obtain contracts * * * which would provide for the payment to them as compensation for their services in obtaining any such reductions in assessments contingent fees of 50 percent of the amount of taxes saved by such taxpayers by reason of any such reduction." Though, therefore, I cannot agree with the holding of the majority that, taking as correct the view that the scheme, as alleged in the indictment, was one to defraud the taxing agencies alone, and the victims of it were those agencies and the other taxpayers whose assessments had not been reduced, the indictment letters must still be held to have been sent in furtherance of that scheme, I do agree that the judgment must be affirmed. For the indictment charges a scheme to defraud defendant's clients as well as the public, and the sending of the indictment letters was not only in furtherance of, it was essential to, the scheme to defraud.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1570220/	271 S.W.2d 842 (1954) MERCURY LIFE & HEALTH COMPANY et al., Appellants, v. William E. HUGHES, Appellee. No. 12623. Court of Civil Appeals of Texas, San Antonio. September 22, 1954. Rehearing Denied October 20, 1954. 843 John Peace, Edward Penshorn, Robert Sawtelle, Lang, Byrd, Cross & Ladon and Cox, Patterson & Smith, San Antonio, for appellants. Hubert W. Green and Boyle, Wheeler, Gresham & Davis, San Antonio, for appellee. W. O. MURRAY, Chief Justice. This is a suit by William E. Hughes against Mercury Life & Health Company, Mercury United Life Insurance Company, both being Texas insurance corporations, Leonard Hyatt, H. C. Plumly, T. H. W. Vordenbaum, C. B. Fulton and James A. Savage, seeking to recover damages for the breach of a contract wherein William E. Hughes was made general manager of the Mercury Life & Health Company for a period of ten years, with the privilege of renewal for another ten years at the option of William E. Hughes. The trial was to a jury and, based upon answers to special issues, judgment was rendered in favor of William E. Hughes against the defendants jointly and severally in the sum of $226,779.63. Exemplary damages in the sum of $50,000 in favor of William E. Hughes against Leonard Hyatt, H. C. Plumly and James A. Savage were also awarded. All of the defendants have appealed. The date of the alleged contract was May 6, 1944. Appellants defended principally upon the ground that the contract was void and unenforceable as being against public policy, because (1) it was executed by virtue of a contractual arrangement to control the management of Mercury Life & Health Company in perpetuity, and was voted at a 844 directors' meeting in which all persons voting had a direct, personal financial interest in the benefits of the contract, and (2) it purported to make of appellee virtually the company for a period of twenty years, thus precluding the management of the company's affairs by its board of directors and its policyholders. A controversy between William E. Hughes and Leonard Hyatt as to the management of Mercury Life & Health Company has been going on for some time. See Hyatt v. Mercury Life & Health Company, Tex.Civ.App., 202 S.W.2d 320; Hyatt v. Hughes, Tex.Civ.App., 221 S.W.2d 998; Hughes v. Sanders, Tex.Civ.App., 243 S.W. 2d 211. The facts leading up to the present phase of this controversy are set out in great detail in the opinion of this Court in Hyatt v. Hughes, Tex.Civ.App., 221 S.W.2d 998, and reference is here made to that opinion for a full statement of such facts. In view of the full statement in our former opinion, we will here only briefly state such facts as we deem absolutely necessary. In 1943 Leonard Hyatt was operating the Mercury Life & Health Company, hereinafter referred to as Mercury, under a management contract which virtually made him the company. On November 30, 1943, Hyatt sold to Hughes a 51% interest in Mercury, retaining for himself a 49% interest. Under this contract of sale Hyatt was to be the president of the company and Hughes chairman of the board of directors. At all annual policyholders' meetings Hughes was to have the privilege of voting by proxy 51% of the policyholders and Hyatt 49%. Hughes had the privilege of naming three directors, Hyatt two. This arrangement was to last as long as the company continued. After this contract was executed Hughes suggested that the general management contract which stood in the name of Hyatt should be changed to his name, inasmuch as he held the controlling interest in the company. This suggestion was followed and on May 6, 1944, a contract was entered into by the board of directors giving to Hughes the power to run the company as though he was the actual owner of it. This contract was similar in every respect to that formerly held by Hyatt. Hughes entered into a separate agreement with Hyatt to the effect that as soon as his contract was approved by the State Board of Insurance Commissioners he would convey to Hyatt a 49% interest in the contract. Hughes' contract was approved by the board, but he did not convey the 49% to Hyatt. This failure resulted in the suit of Hyatt v. Hughes, Tex.Civ.App., reported in 221 S.W.2d 998. In that case we hold, among other things, that Hyatt's contract was not sufficiently complete, definite and certain to support his suit for a breach thereof. After Hyatt had lost his suit against Hughes, he and others attended a policyholders' meeting on January 20, 1947, and were successful in electing directors of Mercury who were favorable to him and unfavorable to Hughes. Hyatt v. Mercury Life & Health Company, Tex.Civ.App., 202 S.W.2d 320. These new directors cancelled Hughes' contract, which under its terms would have otherwise continued for some seventeen more years, and this suit for damages by Hughes for such breach followed. Appellants' first point is that the contract upon which appellee's suit is based is void and unenforceable, being in violation of the public policy of this State. There were four directors present when the contract of May 6, 1944, was entered into with Hughes. These four directors were, William E. Hughes, his wife, Edith C. Hughes, James A. Savage and Leonard Hyatt. Each one of these directors had a direct personal financial interest in the letting of this contract. Hughes and his wife were to receive 51% of the net profits of the company, Hyatt was to receive the remaining 49%, and Savage was to ultimately receive $50,000 for advertising the company over his radio station located in Monterrey, Mexico. The contract of May 6, 1944, was simply the putting into effect the agreement of November 30,1943, and 845 by referring to this latter contract the financial interest of each director is immediately apparent. The rule is well settled in this State that a contract entered into by the directors of a corporation, all of whom have a personal financial interest in such contract, is against public policy and is unenforceable against the corporation. There is a fiduciary relation existing between directors and the corporation which they represent, and where they have a direct personal financial interest in the letting of a contract there is no one to represent the corporation which is a separate legal entity. San Antonio St. R. Co. v. Adams, 87 Tex. 125, 26 S.W. 1040; Scott v. Farmers' & Merchants' National Bank, 97 Tex. 31, 75 S.W. 7; Greathouse v. Martin, Tex.Civ. App., 91 S.W. 385; Hendricks v. Wall, Tex.Civ.App., 277 S.W. 207; Withers v. Edwards, 26 Tex.Civ.App., 189, 62 S.W. 795; Funkhouser v. Copps, Tex.Civ.App., 174 S.W. 897; Roberts v. San Jacinto Shipbuilders, Tex.Civ.App., 198 S.W.2d 488; Dunagan v. Bushey, Tex.Civ.App., 263 S.W.2d 148; Hildebrand on Texas Corporations, Vol. 1, § 133, p. 344. Appellee contends that while the above rules may apply to ordinary corporations, they do not apply to mutual insurance companies such as Mercury, (1) because of the statute against issuing certificates of stock, declaring dividends or paying profits, § 5, Chapter CXI, General Laws, 28th Legislature, p. 175, Vol. 12, Laws of Texas, and (2) because the statutes regulating these companies delegate in effect all of the functions of the board of directors to the Board of Insurance Commissioners. We do not agree with these contentions. It is true that the statutes provide that no stock certificate shall be issued and no dividends or profits paid, and at least 60% of all assessments must be paid into a mortuary fund and the remaining 40% may be applied to paying operating expenses, but it does not follow that the policyholders have no interest in the expense fund of the company. There is nothing to prevent the paying of more than 60% of the premium into the mortuary fund and thus build up a greater reserve and make the policies more valuable. Furthermore, the fact that 40% may be expended for operating expenses does not mean that 40% must be so expended. While the policyholders do not receive dividends, they get other equally valuable benefits. It is the duty of the directors to operate the company as economically as possible and furnish insurance to its policyholders as near actual cost as possible. Therefore, they should not be entering into contracts in which they have a direct personal financial interest. Appellee cites no cases holding that the public policy as to directors of ordinary corporations being disqualified to enter into contracts in which they have a direct personal interest, should not be applied to mutual assessment insurance corporations such as Mercury, and we know of no such authorities. The fact that the Board of Insurance Commissioners has strict supervision over such companies as Mercury does not relieve the Board of Directors of their responsibility in the first place to administer the affairs of the company in an honest and economical manner. Many State and Government Commissioners are given strict supervision over many corporations charged with a public interest, but such fact does not relieve the governing bodies of such corporations from all responsibility to those for whose benefit such corporations were created. We are much impressed with appellants' contention that the contract herein sued upon was void because it took from future directors and future policyholders of Mercury all right to have a voice in the management of the company, but inasmuch as we have held that it was void because passed by directors, all of whom had a direct personal financial interest in the contract, we deem it unnecessary to discuss this contention. That part of the contract herein sued upon is executory and so long as it remains executory it is unenforceable. 846 Appellee further contends that the contract should be upheld upon the theory of ratification, adoption or estoppel. We overrule these contentions. This contract is unenforceable as being against public policy and cannot be ratified or adopted by the mere showing of partial performance, or that the corporation has accepted benefits under the provisions of the contract. Neither does estoppel apply. The court will not lend its aid in the enforcement of rights growing out of an illegal contract, but will leave the parties to the unlawful contract where it finds them. Roberts v. San Jacinto Shipbuilders Inc., Tex.Civ.App., 198 S.W.2d 488; Hildebrand on Texas Corporations, Vol. 1, § 133, p. 344; 10 Tex.Jur. § 330, p. 988; Greathouse v. Martin, supra; 13 Am.Jur. § 980, p. 932, and § 984, p. 939; United Order of Good Samaritans v. Meekins, 155 Ark. 407, 244 S.W. 439, 28 A.L.R. 89; 10 Tex.Jur. pp. 260, 261; 19 C.J.S., Corporations, § 966, p. 421. The judgment is reversed and judgment here rendered that appellee take nothing.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1587220/	120 S.W.3d 878 (2003) CONSECO FINANCE SERVICING CORP. f/k/a Green Tree Financial Servicing Corporation, Appellant, v. J & J MOBILE HOMES, INC. d/b/a Select Homes, Appellee. No. 2-02-273-CV. Court of Appeals of Texas, Fort Worth. October 16, 2003. 880 Higier Lautin Foxman McKinney & Owen, P.C., Richard A. McKinney, Addison, for Appellant. William K. Clary, Bridgeport, for Appellee. Panel B: LIVINGSTON, DAUPHINOT, and HOLMAN, JJ. OPINION TERRIE LIVINGSTON, Justice. Conseco Finance Servicing Corporation, f/k/a Green Tree Financial Servicing Corporation, appeals the take-nothing judgment rendered on its claims following a bench trial on stipulated facts. In three points, appellant contends that the trial court erred: (1) by ruling that appellant's security interest in a manufactured home was extinguished by a tax sale; (2) in finding that appellant did not have a continuing security interest in the home; and (3) in finding that appellant was not entitled to foreclose on the home. We affirm the trial court's judgment. STANDARD OF REVIEW This action was tried to the bench on stipulated facts. Under such circumstances, the reviewing court generally may not find any facts not conforming to the agreed statement, unless the agreement provides otherwise. State Bar v. Faubion, 821 S.W.2d 203, 205 (Tex.App.-Houston [14th Dist.] 1991, writ denied). Accordingly, we will review only the correctness of the trial court's application of law to the stipulated facts, and not infer or find any facts absent from the parties' stipulation. See Rabinowitz v. Cadle Co. II, Inc., 993 S.W.2d 796, 797 (Tex.App.-Dallas 1999, pet. denied); Gibson v. Drew Mortgage Co., 696 S.W.2d 211, 213 (Tex.App.-Houston [14th Dist.] 1985, writ ref'd n.r.e.). In a trial to the court where no findings of fact or conclusions of law are filed, the trial court's judgment implies all findings of fact necessary to support it. Pharo v. Chambers County, 922 S.W.2d 945, 948 (Tex.1996). Where a reporter's record is filed, however, these implied findings are not conclusive, and an appellant may challenge them by raising both legal and factual sufficiency of the evidence. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989). Where such issues are raised, the applicable standard of review is the same as that to be applied in the review of jury findings or a trial court's findings of fact. Id. Where the implied findings of fact are supported by the evidence, it is our duty to uphold the judgment on any theory of law applicable to the case. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); Point Lookout W., Inc. v. Whorton, 742 S.W.2d 277, 278 (Tex.1987). We must 881 uphold the judgment regardless of whether the trial court articulates the correct legal reason for the judgment. See Harrington v. R.R. Comm'n, 375 S.W.2d 892, 895 (Tex.1964); Dale v. Fin. Am. Corp., 929 S.W.2d 495, 497-98 (Tex.App.-Fort Worth 1996, writ denied). STIPULATED FACTS On August 22, 1996 Frances McAdams purchased a manufactured home and executed a retail installment contract and security agreement for the purchase. Appellant purchased the contract and obtained a perfected security interest in the manufactured home, which was noted on the certificate of title. McAdams became delinquent in the property taxes. Boyd ISD and Wise County perfected tax liens on the home for the tax years 1997-2000. Because of the delinquent taxes, an order for a tax warrant was entered on December 11, 2000. The warrant issued on December 18, 2000, and the taxing authorities seized the home the same day. The home was posted for foreclosure because of the unpaid taxes, and appellant received notice on January 6, 2001. On January 17, 2001 the home was sold at public auction to appellee, J & J Mobile Homes d/b/a Select Homes. The parties stipulate that the taxing authorities followed the statutory requirements of a summary tax sale under the Texas Tax Code. Tex. Tax Code Ann. §§ 33.21 .25 (Vernon 2001). Acting pursuant to a court order granting appellant's Motion to Distribute Excess Proceeds, the district clerk sent a check for $5,872.37. Appellant accepted the check, leaving a balance owed on the home of $74,850.13, plus interest. The parties agree that, until the date of the tax sale, appellant had a valid security interest in the home. The status of appellant's lien is only contested after the tax sale. PRIORITY OF THE TAX LIEN Appellant presents three issues on appeal. In its first issue, it claims that the trial court erred in concluding that its lien was extinguished by the January 17, 2001 tax sale. Under the Texas Tax Code, on January 1 of each year, a tax lien attaches to property to secure the payment of all taxes imposed for the year, regardless of whether the taxes are imposed in the year the lien attaches. Tex. Tax Code Ann. § 32.01(a). Moreover, the tax code dictates that: [A] tax lien provided by this chapter takes priority over the claim of any creditor of a person whose property is encumbered by the lien and over the claim of any holder of a lien on property encumbered by the tax lien, whether or not the debt or lien existed before attachment of the tax lien. Id. § 32.05(b). Although there are a certain exceptions to the priority status of tax liens, none are applicable to this case. See id. § 32.05(c).[1] The parties do not dispute the fact that both appellant and the taxing authorities held duly perfected liens on the same property. Appellant's lien was properly recorded on the certificate of title, and pursuant to the tax code, the tax lien attached to the property on January 1, 1997. Id. § 32.01(a). The Manufactured Housing Standards Act provides that proper registration and recordation of a lien under the Act is notice to all persons that the lien exists. Tex.Rev.Civ. Stat. Ann. art. 882 5221f, § 19(m) (Vernon Supp.2003). Liens recorded or registered under the Act have priority, in the chronological order of recordation, over other liens or claims against the manufactured home, other than as expressly provided by Chapter 32, Tax Code. Id. Thus, any priority status granted by the act is made subject to the provisions of the tax code, which expressly grant priority status to tax liens. Tex. Tax Code Ann. § 32.05(b). Therefore, under section 32.05(b) of the tax code, the tax lien was superior to appellant's lien. Id. To protect the property interests of other lienholders, a taxing authority is required to comply with certain notice and procedural requirements before selling property at a tax sale to collect delinquent taxes. See id. § 33.25; see also Burleson v. Gen. Elec. Capital Corp., 831 S.W.2d 54, 60 (Tex.App.-Houston [14th Dist.] 1992, writ denied) (holding that lack of notice of a tax sale to junior lienholders is a basis for a claim for damages against the taxing authority). Even so, failure to send notice to a junior lienholder does not affect the validity of the sale or title to the seized property. See Tex. Tax Code Ann. § 33.25(b). Although appellant does not dispute that it received proper notice of the tax sale, appellant nonetheless claims that its lien on the home survives a properly conducted tax sale on the property. We hold that it does not. Appellant relies heavily on Burleson v. General Electric Capital Corporation. In Burleson, GECC, the junior lienholder, financed the purchase of a mobile home and duly perfected its lien. 831 S.W.2d at 57. Because of delinquent taxes, a tax warrant issued, the home was seized, and a summary sale conducted. Id. The taxing authority failed to conduct a reasonable search to determine whether other lienholders existed on the home. Id. at 58. As a result, GECC was not given notice of the sale. Id. Consequently, the purchaser of the home at the tax sale also had no notice that a lien existed on the home. Id. The Burleson court held that the purchaser was a bona fide purchaser who bought the home in good faith, for valuable consideration, without knowledge of any outstanding claims against the property. Id. at 59. GECC's lien was extinguished by the tax sale, and it was unable to defeat the purchaser's title because of the purchaser's bona fide status. Id. Although GECC could not defeat the purchaser's claim of title based upon lienholder's lack of notice, the court did not preclude GECC from recovering from the governmental entities on a negligence theory because they failed to give notice of the tax sale. Id. at 60. Burleson can be distinguished from the present case since the present case does not involve a bona fide purchaser, or a claim for damages against the taxing authority. The holding of Burleson provides recourse for perfected junior lienholders, who are damaged when governmental authorities deprive them of their property rights, by extinguishing their lien in foreclosure, without proper notice. See id. Here, appellant received proper notice. The court and the junior lienholder in Burleson both recognized that the junior lien did not survive the foreclosure of a superior tax lien. See id. (noting that the lienholder's lien was "cut off" by the tax warrant sale and that the lienholder was deprived of its interest in the property). Moreover, the lienholder in Burleson never claimed that its lien survived the tax sale. Id. It was the appellants in Burleson who argued that the lien survived the tax sale in an attempt to avoid GECC's claim for damages. In the present case, the taxing authority followed all required statutory procedures and provided adequate notice to 883 appellant. The Burleson holding tends to support appellee's proposition that appellant's junior lien was extinguished by foreclosure of the senior tax lien. It stands to reason that if an improperly conducted tax sale is sufficient to "cut off" the junior lienholder's interest in the property, a properly conducted tax sale does so as well. The law of secured transactions and common law also provide us with guidance.[2] Under the business and commerce code, the disposition of collateral after default transfers to the transferee for value all of the debtor's rights in the collateral. TEX. BUS. & COM.CODE ANN. §§ 9.617, 9.622 (Vernon 2002). Disposition by foreclosure discharges the security interest being foreclosed, as well as any subordinate interests and liens. Id. § 9.617. Common-law also applies to both real and personal property. The Texas Supreme Court has noted that proper notice and foreclosure of a lien on property causes legal and equitable title in the property to merge. See Flag-Redfern Oil Co. v. Humble Exploration Co., 744 S.W.2d 6, 9 (Tex.1987); Arnold v. Eaton, 910 S.W.2d 181, 184 (Tex. App.-Eastland 1995, no writ). Accordingly, in foreclosure prior lienholders are divested of title to the property, and their liens are extinguished. See Nat'l W. Life Ins. Co. v. Acreman, 425 S.W.2d 815, 817 (Tex.1968). Following the valid foreclosure of a senior lien, junior liens, if not satisfied from the proceeds of sale, are extinguished. Id. at 817-18; Eaton, 910 S.W.2d at 184; Mortgage & Trust, Inc. v. Bonner & Co., 572 S.W.2d 344, 352 (Tex. Civ.App.-Corpus Christi 1978, writ ref'd n.r.e.). Thus, when a senior lien is foreclosed, the purchaser at the sale acquires title to the property free from any junior lienholder claims. Diversified Mortg. Investors v. Lloyd D. Blaylock Gen. Contractor, Inc., 576 S.W.2d 794, 806 (Tex.1978) (op. on reh'g); Irving Lumber Co. v. Alltex Mortg. Co., 468 S.W.2d 341, 343-44 (Tex. 1971); Acreman, 425 S.W.2d at 817-18; Bonner & Co., 572 S.W.2d at 352. Appellant agrees that the preceding rules apply to the foreclosure of real property; however, appellant argues that the legislature did not intend for liens on personal property to be extinguished. Appellant's basis for its argument is the absence of a comparable section to section 33.95 of the tax code from the subchapter entitled "Seizure of Personal Property."[3] Appellant reasons that the absence of the provision indicates that the legislature intended that only purchasers of real property at tax sales take free of junior liens and not those purchasing personal property. Thus, appellant's first issue presents us with a question of statutory interpretation. STATUTORY INTERPRETATION Statutory interpretation presents a question of law subject to de novo review. Mitchell Energy Corp. v. Ashworth, 943 S.W.2d 436, 437 (Tex.1997) (orig.proceeding); State v. Heal, 917 S.W.2d 6, 9 (Tex. 1996) (op. on reh'g). A trial court has no discretion when evaluating a question of law. See Huie v. DeShazo, 922 S.W.2d 920, 927 (Tex.1996) (orig.proceeding); Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992) (orig.proceeding). Accordingly, we give no particular deference to the trial court's findings. Walker, 827 S.W.2d at 884 840. Instead, we conduct an independent review and evaluate the statute to determine its meaning. See Nipper-Bertram Trust v. Aldine I.S.D., 76 S.W.3d 788, 791-94 (Tex.App.-Houston [14th Dist.] 2002, pet. denied) (interpreting the Texas Tax Code); Lozano v. Lozano, 975 S.W.2d 63, 66 (Tex.App.-Houston [14th Dist.] 1998, pet. denied). A court's primary objective in construing a statute is to determine and give effect to the legislative intent. Liberty Mut. Ins. Co. v. Garrison Contractors, Inc., 966 S.W.2d 482, 484 (Tex.1998). Under accepted principles of statutory construction, if the language of a statute is unambiguous, then the court must seek the legislative intent as found in the plain and common meaning of the words and terms used. Sorokolit v. Rhodes, 889 S.W.2d 239, 241 (Tex.1994). Common words should be interpreted as they are commonly used. Elgin Bank v. Travis County, 906 S.W.2d 120, 121 (Tex.App.-Austin 1995, writ denied). In our construction, we must presume that the entire statute is intended to be effective, a just and reasonable result is intended, a result feasible of execution is intended, and that the public interest is favored over private interest. See Tex. Gov't Code Ann. § 311.021 (Vernon 1998); Compass Bank v. Bent Creek Inv., Inc., 52 S.W.3d 419, 424 (Tex.App.-Fort Worth 2001, no pet.). Thus, we must consider the statute in its entirety, including the consequences that would follow from each proposed construction. Atascosa County v. Atascosa County Appraisal Dist., 990 S.W.2d 255, 258 (Tex.1999). So long as another reasonable interpretation exists, we are required to reject an interpretation of a statute that defeats the purpose of the legislation. Id.; Dallas Cent. Appraisal Dist. v. Wang, 82 S.W.3d 697, 700 (Tex. App.-Dallas 2002, no pet.) (interpreting the Texas Tax Code). Construction of a statute that would make a provision useless is not favored by law. Carson v. Hudson, 398 S.W.2d 321, 323 (Tex.Civ.App.-Austin 1966, no writ). Specifically at issue in the present case, is the application of chapter 33, subchapter E, section 33.95 of the tax code, which provides: A purchaser for value at or subsequent to the tax sale may conclusively presume the validity of the sale and takes free of any claim of a party with a prior interest in the property subject to the provisions of Section 16.002(b), Civil Practice and Remedies Code, and subject to applicable rights of redemption. TEX. TAX CODE ANN. § 33.95. Appellant argues that this provision, which is found in the subchapter headed "Seizure of Real Property," has no application in the present case because the manufactured home is considered personal property. Moreover, appellant reasons that the absence of a comparable provision from the subchapter titled "Seizure of Personal Property" indicates legislative intent that a tax sale should not extinguish pre-existing junior liens after a properly conducted tax sale. We disagree. Subchapter E of the Texas Tax Code was added by senate bill 1545 during the seventy fourth legislative session. Act of May 27, 1995, 74th Leg., R.S., ch. 1017, § 1, 1995 Tex. Gen. Laws 5085, 5085-86 (amended 1997) (current version at Tex. Tax Code Ann. § 33.95 (Vernon 2001)). When the legislature added subchapter E, it noted that subchapter B of chapter 33, which governed the seizure of personal property, provided an administrative process for taxing units to seize and sell personal property by warrant. House Comm. On Jurisprudence, Bill Analysis, Tex. S.B. 1545, 74th Leg., R.S. (1995). The legislature wanted to create a similar provision applicable to real property. Id. 885 In response, the legislature enacted senate bill 1545, as chapter 33, subchapter E, of the tax code. The subchapter was created with the intent to empower municipalities to seize and sell real property by warrant in the same manner as personal property. Id. The overall goal of the legislation was to facilitate the seizure of abandoned, unused, or vacant properties, revitalize deteriorated neighborhoods, reduce governmental expenditures, and provide an increased tax base. Id.; Senate Comm.On Jurisprudence, Bill Analysis, Tex. S.B. 1545, 74th Leg., R.S. (1995). As the legislative history demonstrates, the legislature's intent in enacting subchapter E of chapter 33 was simply to make the administrative process governing a taxing entity's seizure of property uniform, regardless of whether the property seized was real or personal property. Nothing in the legislative history or in the language of the statute itself indicates legislative intent to supercede the common-law rule that foreclosure of a senior lien extinguishes all junior liens. Indeed, if junior liens were to survive a foreclosure sale, buyers would have no incentive to bid on the property. Such an outcome would undermine the legislature's goals in enacting subchapter E. Although the heading of subchapter E, "Seizure of Real Property," provides guidance with respect to its application, it should not be interpreted in a way that would limit the application of the statutes found under it. See Tex. Gov't Code Ann. § 311.024. Additionally, the statute itself uses the word "property" and does not distinguish between realty or personalty. See Tex. Tax Code Ann. § 33.95. The tax code defines "property" as "any matter or thing capable of private ownership." Id. § 1.04(1). Thus, to interpret the statute in a manner that would limit its application solely to real property tax sales, as compared to all "property" sales, would be contrary to the overall purpose of the chapter. The absence of a similar statute in the personal property subsection of the tax code cannot be construed to mean that a purchaser of personal property does not take free of the junior lien, as a purchaser of real property would. To construe the tax code in this way would produce an absurd result and undermine the intent of the legislature to facilitate tax sales of real property in the same manner as personal property. Since Texas is one of the few states that allows real property to be foreclosed upon nonjudicially, the application of real property nonjudicial procedures to the disposition of personal property is a reasonable application. See Tex. Prop. Code Ann. § 51.002 (Vernon 1995). The public interest is best served if, in accordance with common law and consistent with the purpose of the tax code, the purchaser of personal property at a tax sale takes the property free from any claim of a party with a prior interest. Likewise, appellant's reliance on Burleson is misplaced because the Burleson court never addressed whether section 33.95 of the tax code applied to personal property since the section had yet to be added to the code at the time Burleson was heard. Appellant also argues that the use of the words "subject to applicable rights of redemption" limit the statute's application to real property since there is no right of redemption with regard to personal property. Appellant cites no authority to support this proposition; accordingly, it is waived. See Tex.R.App. P. 38.1(h) (providing that arguments must be supported by appropriate citations to authorities); Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284 (Tex.1994) (citing long-standing rule that a point may be waived due to inadequate briefing). *886 Appellant further argues that the foreclosure of a tax lien is the same as a judgment lien and sale under execution. For authority he cites section 34.01 of the tax code, which states that the sale of property seized and sold in a tax sale shall be conducted in the manner similar to the way property is sold under execution. Tex. Tax Code Ann. § 34.01(a). Appellant reasons that under Texas Rule of Civil Procedure 643 a tax lien is the equivalent of a judicial lien created when an officer levies upon personal property under a writ of execution. Tex.R. Civ. P. 643. Appellant argues a tax lien is therefore subordinate to a security interest noted on the certificate of title. We disagree. Appellant ignores the fact that tax liens are, by statute, given express priority status over security interests noted on certificates of title. See Tex. Tax Code Ann. § 32.05. Section 34.01 addresses the procedures required for a proper tax sale; it does not convert a tax lien into a judicial lien. Therefore, we hold that the January 17 tax sale extinguished appellant's junior lien. We overrule appellant's first issue. CONCLUSION In light of our holding, it is unnecessary for us to consider appellant's remaining issues. Tex.R.App. P. 47.1. The judgment of the trial court is affirmed. NOTES [1] The tax code gives priority over tax liens to a survivor's allowance, funeral expenses, expenses of a last illness, restrictive covenants, and valid easements recorded before January 1 of the year in which the tax lien arises. Tex. Tax Code Ann. § 32.05(c). [2] The Manufactured Housing Standards Act supersedes any conflicting provisions of the business and commerce code; otherwise, the provisions of the business and commerce code apply to transactions relating to manufactured housing. Tex.Rev.Civ. Stat. Ann. art. 5221f, § 19(p). [3] Compare Tex. Tax Code Ann. §§ 33.21-.25 (subchapter B) with Tex. Tax Code Ann. §§ 33.91-.95 (subchapter E).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2020856/	113 Ill. App.3d 265 (1983) 446 N.E.2d 1267 THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. ALFREDO CASTRO, Defendant-Appellant. No. 81-1783. Illinois Appellate Court First District (2nd Division). Opinion filed March 15, 1983. 266 Katz, Hirsch, Wise & Colky, Ltd., of Chicago, for appellant. Richard M. Daley, State's Attorney, of Chicago (Michael E. Shabat, Raymond Brogan, and Thomas Wood Flynn, Assistant State's Attorneys, of counsel), for the People. Judgment affirmed. JUSTICE HARTMAN delivered the opinion of the court: A jury found defendant, Alfredo Castro, guilty of aggravated kidnaping and attempted deviate sexual assault of Anthony Sasso, a severely retarded 16-year-old boy. Castro appeals, raising as issues whether: (1) the circuit court properly allowed the State to add and strike certain allegations and correct a citation in the information brought against him; (2) the State proved that he had secretly confined Anthony against his will and forced him to submit to an act of deviate sexual intercourse; (3) testimony concerning Anthony's I.Q. and social maturity test scores was admissible; and (4) the court committed reversible error when it informed the jury that the confinement of a child under 13 years of age is presumed to be against his will if his parents have not consented to that confinement. At trial, Anthony's sister, Rose Marie Sasso, testified that she and her family lived in the 2700 block of west 18th Street, Chicago, on October 30, 1980. At 7:30 p.m. Anthony went to a grocery store nearby where he would go often to perform chores in return for candy or soda. When Anthony did not return home by 8 p.m., the time the 267 store closed, Rose went looking for him, could not find him, and told her mother, Gloria Ortiz, what had happened. Ortiz testified that after looking for Anthony for almost an hour she called the police. Ortiz described Anthony to investigating police, who communicated this description over the police radio. She and the officers then drove around, unsuccessfully searching for Anthony. Investigating officer Alberta Raymond testified similarly to Ortiz. Officer Kenneth Maduzia testified that at 10:30 p.m. he and his partner, James Henderson, were on routine patrol. They noticed a late model Chevrolet pickup truck, with a camper on the back, parked within one block of Anthony's home. It was rocking back and forth. Looking into the back of the truck, they saw Castro roll off Anthony's back. Anthony was lying face down in the camper; his clothes were in disarray; his pants and underpants down around his ankles, and his hair messed up. Castro's pants and underpants were also down around his ankles. Castro's penis was erect.[1] The police notified Ortiz and took Anthony to Mt. Sinai Hospital. The parties stipulated that Dr. Kim, a resident, examined him and observed that there was no tearing, trauma, or bleeding in or around Anthony's anus. He found no sperm on either Anthony's or Castro's underwear. The parties also stipulated that Castro was age 44. Dr. Traute Page testified for the State. She is a medical doctor and was director of the Esperanzo School for the mentally retarded since 1972, which school Anthony had attended since age 6. The school held a total enrollment of 76 students. Anthony's I.Q. was 30; a normal I.Q. is between 90 and 100. Anthony's Vinland Social Maturity Test scale indicated a mental ability of age 7, yet Anthony could not write his name, tell time, or wash or dress himself without help. He could not speak in complete sentences and had difficulty answering even very simple questions. He is a very trusting and affectionate child. Castro neither testified nor called any witnesses. When the State rested, he moved for a directed verdict on both counts. Count I had charged Castro with the offense of "attempt, in that he, [sic] attempted by force and threat of force, to compel Anthony Sasso to submit to an act of deviate sexual conduct, to wit: anal intercourse, in violation of Chapter 38, Section 11-3 Illinois Revised Statutes * * ." The court granted the State's subsequent motions to strike the words "and threat of force" and to amend count I to charge Castro with violating of section 8-4 of the Criminal Code of 1961 (defining attempt) 268 rather than section 11-3 of the Code (defining deviate sexual assault). 1 Castro contends that the words stricken constituted a material element of the offense for which he was charged and were not an unnecessary allegation in light of the conjunctive phraseology used. The State characterizes the words as mere surplusage and argues that the language of the statute rather than the words used in the information determine whether an allegation is essential or not. Less specificity is required in charging elements of an inchoate, rather than completed, offense. (People v. Williams (1972), 52 Ill.2d 455, 461, 288 N.E.2d 406.) Further, in light of the evidence adduced at trial and the fact the State only had to show that Castro either used or threatened to use force, the words "and threat of force" were unnecessary and properly stricken. (See People v. Simon (1981), 101 Ill. App.3d 89, 427 N.E.2d 843; People v. Tuczynski (1978), 62 Ill. App.3d 644, 378 N.E.2d 1200; and People v. Adams (1977), 45 Ill. App.3d 334, 359 N.E.2d 840.) Moreover, misciting the applicable statutory provision in an indictment is a formal rather than a substantive defect, which may be corrected at any time. See section 111-5 of the Code of Criminal Procedure of 1963 (Ill. Rev. Stat. 1979, ch. 38, par. 111-5), and People v. Boyd (1980), 87 Ill. App.3d 978, 981, 409 N.E.2d 392. 2 The State amended count II shortly before trial, adding the words "and did secretly confine said Anthony Sasso," the information thereby charging Castro with the offense of aggravated kidnaping in that "he knowingly by force and threat of the imminent use of force carried Anthony Sasso from one place to another with the intent to secretly confine him against his will and did secretly confine said Anthony Sasso and attempted to commit a felony, to wit: deviate sexual assault upon him, in violation of Chapter 38, Section 10-2(a)(3) Illinois Revised Statutes * * ." Castro contends that the circuit court should not have permitted this amendment on the eve of trial, but cites no authority in support of his argument. "An indictment * * may be amended * * * at any time because of formal defects * * " (emphasis added) (Ill. Rev. Stat. 1979, ch. 38, par. 111-5), particularly where, as here, the insertion of the words did not change the substance of the charge. The amendment does not appear to have affected Castro's strategy at trial or the jury's verdict. This objection is without merit. 3 After Castro moved for a directed verdict, the circuit court granted the State's motion to strike the words "and threat of the imminent use of force carried Anthony Sasso from one place to another." 269 As a result, count II actually charged Castro with violating section 10-1(a)(1) of the Criminal Code of 1961 (Ill. Rev. Stat. 1979, ch. 38, par. 10-1(a)(1)), rather than section 10-1(a)(2) of the Code (Ill. Rev. Stat. 1979, ch. 38, par. 10-1(a)(2)). Castro contends that these subsections define separate and distinct offenses and that he was therefore convicted of an offense other than the one for which he was charged. Section 10-1 defines but one offense, kidnaping. Subsections 10-1(a)(1), (2) and (3) simply define three different ways that the crime may be committed. See People v. Allen (1974), 56 Ill.2d 536, 309 N.E.2d 544, cert. denied (1974), 419 U.S. 865, 42 L.Ed.2d 102, 95 S.Ct. 120, where the court rejected a similar argument related to murder; see also People v. Hadley (1974), 20 Ill. App.3d 1072, 314 N.E.2d 3. 4 Castro next contends that the State failed to prove that he secretly confined Anthony against his will or that he forced him to submit to an act of deviate sexual intercourse. The jury here had the right to consider the difference in the ages of Castro, 44, and the victim, 16. The evidence showed that the victim was severely retarded, with a mental age of 7. Officers Maduzia and Henderson testified that: they found Castro lying on top of Anthony with his penis erect; both of them still had their pants partially on; their clothes were in disarray; and Anthony's hair was disheveled. They also testified that what had drawn their attention to the truck in the first place was the fact that it was rocking back and forth. From these facts a jury could have concluded that Anthony was struggling to prevent Castro from having intercourse with him and to extricate himself from the situation. (See People v. Zeiger (1981), 100 Ill. App.3d 515, 426 N.E.2d 1229.) The State may prove its case by circumstantial as well as direct evidence and a jury or other factfinder may draw all reasonable inferences from that evidence. (Ohio Building Safety Vault Co. v. Industrial Board (1917), 277 Ill. 96, 102-03, 115 N.E. 149; Conreaux v. Industrial Com. (1933), 354 Ill. 456, 463, 188 N.E. 457.) It is not the function of a reviewing court to substitute its judgment for that of the jury upon controverted questions of fact. (Geraghty v. Burr Oak Lanes, Inc. (1955), 5 Ill.2d 153, 163, 125 N.E.2d 47; Trauscht v. Gunkel (1978), 58 Ill. App.3d 509, 374 N.E.2d 843.) We find no error. 5 Castro next argues that Page's testimony concerning Anthony's I.Q. and social maturity test scores was incompetent, irrelevant, repetitive, unduly prejudicial and hearsay because it was based upon scientific determinations made by another person. Page was a doctor. She had known Anthony for nine years. The State was required to prove that Anthony had not voluntarily gone with Castro to 270 his truck or agreed to have intercourse with him there. The essence of Page's testimony called into question Anthony's capacity to have consented to either act because he was severely retarded. Dr. Page's testimony was both competent and relevant, therefore. With regard to Castro's hearsay objection, it appears to be well-settled law that experts may consider not only medical and psychological records commonly relied upon by members of their profession in forming their opinions (People v. Ward (1975), 61 Ill.2d 559, 338 N.E.2d 171), but may testify as to the contents of these records as well. People v. Rhoads (1979), 73 Ill. App.3d 288, 391 N.E.2d 512; In re Germich (1981), 103 Ill. App.3d 626, 431 N.E.2d 1092; and Kinsey v. Kolber (1982), 103 Ill. App.3d 933, 431 N.E.2d 1316. Lastly, Castro argues that the court committed reversible error when it read to the jury Illinois Pattern Jury Instruction, Criminal, No. 8.03 (2d ed. 1981). That instruction is based upon section 10-1(b) of the Criminal Code of 1961 (Ill. Rev. Stat. 1979, ch. 38, par. 10-1(b)), which reads: "Confinement of a child under the age of 13 years is against his will within the meaning of this Section if such confinement is without the consent of his parent or legal guardian." Castro contends that the court had no legal or factual basis upon which to tender this instruction because Anthony was 16 years of age when the events described occurred. He contends that the legislature could only have meant physical as opposed to mental age when it used the word "age" in the above-cited statutory provision. The State maintains that section 10-1(b) should be construed to refer to either mental or physical age. 6 The question appears to be one of first impression in this State. There is neither any record of the legislative debates concerning section 10-1(b), nor committee comments. We are left to surmise what the legislature meant by the words "13 years of age." As used in the law of rape, to which deviate sexual assault cases refer in determining force or want of consent (see, e.g., In re Darcy (1974), 18 Ill. App.3d 1068, 1069-70, 311 N.E.2d 353), will or consent contemplates an exercise of intelligence based on knowledge of its significance and moral quality and there must be a choice between resistance and assent. (See Black's Law Dictionary 276 (5th ed. 1979).) Manifestly, when the legislature adopted section 10-1(b) it did not believe an average child under 13 years of age could exercise that intelligence based on knowledge of its significance and moral quality with respect to confinement of this type. Patently, a mentally retarded child who lacks both the intelligence and social maturity of a normal 7-year-old is in no better position to exercise his will or consent to being 271 taken from one place to another or to taking part in an act of deviate sexual intercourse, irrespective of his chronological age. We conclude that the instruction was properly given. Castro contends that the circuit court committed reversible error when it read the challenged instruction to the jury because in doing so, the court needlessly highlighted Dr. Page's testimony concerning Anthony's I.Q. and social maturity test score, which he argues were inadmissible and prejudicial. Since we have concluded that Dr. Page's testimony was admissible, we find no merit in this latter argument. For the foregoing reasons, we find no reason to disturb defendant's convictions for aggravated kidnaping and attempted deviate sexual assault. Affirmed. DOWNING, P.J., and PERLIN, J., concur. NOTES [1] Officer Henderson's testimony was essentially the same as Maduzia's.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1146471/	837 So. 2d 48 (2002) Sharon L. DeSOTO v. Nidal A. BALBEISI, USAgencies Casualty Insurance Company and State Farm Mutual Automobile Insurance Company. No. 2002 CA 0169. Court of Appeal of Louisiana, First Circuit. December 20, 2002. Rehearing Denied February 3, 2003. 49 Leonard Cardenas, III, Baton Rouge, Counsel for Plaintiff/Appellee Sharon L. DeSoto. William F. Janney, Baton Rouge, Counsel for Defendant/Appellant State Farm Mutual Automobile Insurance Company. Thomas Gibbs, Baton Rouge, Counsel for Defendants USAgencies Casualty Insurance Company and Nidal A. Balbeisi. Before: KUHN, DOWNING and GAIDRY, JJ. DOWNING, J. This is an appeal from a judgment awarding the plaintiff, Sharon L. DeSoto, attorney fees of $28,890.00 against State Farm Mutual Automobile Insurance Company for its failure to timely tender uninsured/underinsured motorist policy limits and medical benefits. For the following reasons, we amend the judgment of the trial court and affirm the judgment as amended. 50 FACTS AND PROCEDURAL HISTORY This case arises out of a motor vehicle collision in Baton Rouge, Louisiana, on April 14, 1999. Sharon L. DeSoto was seriously injured when a vehicle operated by defendant, Nidal A. Balbeisi, struck her vehicle. Plaintiff named as defendants Nidal Balbeisi and the two insurers that insured him in connection with the accident, USAgencies Casualty Insurance Company (USAgencies) and State Farm Mutual Automobile Insurance Company. On December 16, 1999, plaintiff filed an amending petition adding as a defendant her own uninsured/underinsured (UM) motorist carrier insurer, State Farm Mutual Automobile Insurance Company (State Farm). In her amending petition, plaintiff alleged that she provided State Farm with a satisfactory proof of loss on or about October 22, 1999, and that State Farm failed to tender its UM liability policy limits and medical payment limits under her policy within the thirty day time period stipulated in La. R.S. 22:658. Plaintiff sought statutory penalties, attorney fees, costs, and judicial interest. State Farm contended that a satisfactory proof of loss was not made until November 4, 1999, when plaintiff sent verification of the underlying policy limits of the defendant driver's liability carrier, USAgencies. State Farm admitted in its pre-trial memorandum that its check, which was mailed out on December 10, 1999, to settle plaintiff's claim, was technically late by six days and that it owed a statutory penalty in the amount of $1,413.73 as a result of the late payment.[1] However, it insisted that the brief delay in sending out the payment did not warrant imposing attorney's fees pursuant to La. R.S. 22:658.[2] Although plaintiff received all insurance available in connection with the accident prior to trial, plaintiff proceeded to trial against the defendant driver in order to obtain a judgment for the damages sustained in excess of available insurance. Plaintiff also sought to enforce the contested attorney fees due for State Farm's untimely payment of its UM and medical benefits limits. Thus, the only issues remaining for resolution at trial were the liability of the defendant driver, the amount of plaintiff's damages, and any attorney fees that might be due from State Farm by reason of its untimely tender of funds due under plaintiff's own UM policy. After a bench trial, the trial judge found that the conduct of State Farm in delaying transmission of payment of the UM and medical benefit limits was arbitrary and capricious. Plaintiff was awarded $28,890.00 in attorney fees. From this portion of the judgment, State Farm appeals, assigning two errors by the trial court, as follows: 1. The Trial Court committed manifest and reversible error of law in considering the contingency fee contract and awarding attorney fees based upon the total awarded DeSoto against Balbeisi and the Appellate Court should conduct a trial de novo on the issue of attorney fees. 51 2. The Trial Court abused its discretion in awarding $28,890.00 in attorney fees to DeSoto against State Farm Mutual Automobile Insurance Company. DISCUSSION Applicable Law Louisiana Revised Statutes 22:658(A)(1) provides: All insurers issuing any type of contract, other than those specified in R.S. 22:656, R.S. 22:657, and Chapter 10 of Title 23 of the Louisiana Revised Statutes of 1950, shall pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured or any party in interest. Louisiana Revised Statutes 22:658(B)(1) further provides, in pertinent part: Failure to make such payment within thirty days after receipt of such satisfactory written proofs and demand therefor, as provided in R.S. 22:658(A)(1) ... when such failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty, in addition to the amount of the loss, ..., together with all reasonable attorney fees for the prosecution and collection of such loss, or in the event a partial payment or tender has been made, ten percent of the difference between the amount paid or tendered and the amount found to be due and all reasonable attorney fees for the prosecution and collection of such amount. (Emphasis added.) Louisiana Revised Statutes 22:658 is a penal statute, and as such it must be strictly construed. Vaughn v. Franklin, 00-0291, p. 15 (La.App. 1 Cir. 3/28/01), 785 So. 2d 79, 91, writ denied, 01-1551 (La.10/5/01), 798 So. 2d 969. It subjects an insurer, when it is arbitrary and capricious in failing to unconditionally tender the undisputed amount within thirty days of satisfactory proof of loss, to the mandatory imposition of penalties and attorney fees for the collection of such loss. See Calogero v. Safeway Insurance Company of Louisiana, 99-1625, p. 7 (La.1/19/00), 753 So. 2d 170, 174. A "satisfactory proof of loss" is that which is sufficient to fully apprise the insurer of the insured's claim. McDill v. Utica Mutual Insurance Company, 475 So. 2d 1085, 1089 (La.1985). In order to recover attorney fees pursuant to La. R.S. 22:658, the burden of proof is on the claimant to demonstrate, as a prerequisite to showing that the insurer was arbitrary and capricious in denying benefits, that a satisfactory proof of loss was made. It is undisputed that plaintiff submitted satisfactory proof of loss to State Farm on its UM claim on November 4, 1999 and that State Farm's tender to plaintiff was untimely. Thus, the only issue presented for review is whether the amount of attorney fees awarded was excessive under the particular facts and circumstances of this case. It is well established that the trial court's conclusion with respect to the assessment of penalties and attorney fees under La. R.S. 22:658 is, in part, a factual determination and should not be disturbed in the absence of a finding that it was manifestly erroneous. Bauer v. White, 532 So. 2d 506, 509 (La.App. 1 Cir.1988). In determining an award of attorney fees to be assessed pursuant to La. R.S. 22:658, the trial court should consider the services needed to effect recovery, the degree of professional skill and ability exercised, the volume of work performed, the time devoted to the case, the result obtained, the novelty and difficulty of the questions involved, 52 and the percentage fixed for attorney fees in the plaintiff's contract. Khaled v. Windham, 94-2171, p. 11 (La.App. 1 Cir. 6/23/95), 657 So. 2d 672, 680. Assignments of Error State Farm argues that the trial judge committed legal error in basing the attorney fees assessed on the total recovery awarded to plaintiff and abused its discretion by basing such fee on the attorney's contingency fee contract.[3] When a legal error interdicts a finding of fact, the appellate court must review the record de novo and render judgment without respect to the manifest error rule. Gonzales v. Xerox Corp., 320 So. 2d 163 (La.1975). Here, we agree that the trial court committed legal error when it based its award of attorney fees on the total recovery awarded rather than on the attorney's efforts expended for "the prosecution and collection of" the loss. La. R.S. 22:658(B)(1). We observe that the "loss" referenced in this statute is the "amount of any claim due [the] insured." La. R.S. 22:658(A)(1). Accordingly, after reviewing the entire record de novo to evaluate Plaintiff's entitlement to attorney fees, we agree that the fees awarded against State Farm in this case were excessive and constituted an abuse of the trial court's discretion. Louisiana Revised Statute 22:658 provides for an award of reasonable attorney fees as a penalty for untimely payment of the amount due as demonstrated in a satisfactory proof of loss and provides for attorney fees for the prosecution and collection of such loss. Although the amount in controversy between State Farm and plaintiff does not cap the attorney's fee award, the statute plainly relates the attorney fees award to the efforts expended in the collection of the amount due to the insured from State Farm. Thus, in assessing a reasonable fee, it is appropriate to consider all of counsel's efforts in connection with that claim, but only those efforts. In this case, plaintiff's counsel had to establish that the defendant driver was at fault and had to establish the value of the injuries sustained in order to recover from the defendant driver, Balbeisi, and his two insurers. The record supports the conclusion that plaintiff's counsel did a thorough and professional job in preparing plaintiff's case. However, little additional effort was required on the part of counsel to obtain the tender of the State Farm limits, which were paid in full, albeit approximately six days late. Counsel for plaintiff submitted a proof of loss to State Farm. On October 22, 1999, he also sent State Farm copies of the medical records and other documentation of damages in discovery responses provided to the liability insurers of the defendant driver, Nidal Balbeisi. A few days later, on October 25, 1999, plaintiff's counsel wrote to State Farm in its capacity as plaintiff's UM insurer, advising of the inadequate amounts of the total underlying liability limits, and demanding that its UM coverage limits be paid by October 29, 1999. On October 29, State Farm's management authorized tender of the UM coverage limits and payment of medical expenses under the medical payments coverage. Shortly thereafter, on November 1, 1999, the State Farm claims representative responded to plaintiff's demand, offering to pay the UM limits and medical benefit payments, upon receipt of evidence of the USAgencies policy limits. This evidence 53 was provided on November 4, 1999, and a check was sent out by State Farm on December 10, 1999. After receiving payment from State Farm, counsel for plaintiff filed an amending petition seeking penalties, attorney fees, costs, and judicial interest for State Farm's untimely payment. Counsel for plaintiff moved for production of State Farm's claims file. The discovery request was opposed, requiring the preparation of a supporting memorandum and the trial court's in camera inspection of the file. Plaintiff's counsel was successful in obtaining portions of that file, which were introduced into evidence against State Farm at trial. Plaintiff's counsel also deposed the State Farm claims adjuster regarding the untimely tender of UM limits and medical payments. Trial of this matter was concluded in one day. These efforts, however, were not expended to prosecute and collect plaintiff's claim against State Farm, such claim having been paid on December 10, 1999. It is clear that plaintiff went to trial primarily to establish the total amount of damages sustained in the accident in order to obtain an excess judgment against the defendant driver, Nidal Balbeisi. The bulk of the trial was directed toward substantiating plaintiff's damages in order to obtain the largest possible judgment against the defendant driver. By the time of trial, State Farm had admitted that plaintiff tendered a satisfactory proof of loss by November 4, 1999, and that its payment on December 10, 1999, was untimely. State Farm merely contested whether its brief delay warranted the imposition of attorney fees. The testimony of only one of the four witnesses at trial related directly to the attorney fees claimed against State Farm. Plaintiff's counsel introduced no evidence regarding the number of hours devoted to the attorney fees issue. No novel issues of law were presented. Although the trial judge has great discretion in the amount of attorney fees awarded, the discretion of the trial judge is not unlimited. Bauer, 532 So.2d at 510. After reviewing the record in its entirety and considering the efforts related specifically to State Farm, we are left with the conviction that the award made in this case was clearly excessive. We have considered the evidence substantiating the labors of plaintiff's counsel, the result obtained, the skill exercised, the contingency fee contract of plaintiff's counsel, the degree of difficulty of the case, and the fact that the labors of plaintiff's counsel were directed primarily at establishing claims against the defendant driver and his two insurers. But primarily we consider the minimal attorney's efforts actually needed to prosecute and collect the plaintiff's claim that was paid six days late. State Farm suggests that an attorney fees award of $2,500.00 would be the highest award appropriate under the facts and circumstances of this case in which it tendered the payment due in an untimely manner. Pursuant to La. R.S. 22:658, attorney fees are due only for the "prosecution and collection of such loss." While we are inclined to limit the attorney fees award even further, and would not take into consideration the services rendered after the State Farm limits were paid, in view of State Farm's admission that an award of at least $2,500.00 would be appropriate, we will reduce the award to that amount. In so holding, we note our disagreement with our brethren of the Fourth Circuit and their holding in Daney v. Haynes, 630 So. 2d 949 (La.App. 4 Cir. 1993) where they interpret the word "loss" as used in La. R.S. 22:658(B)(1) to include penalties and attorney fees. In so holding, 54 the Fourth Circuit states that to hold otherwise would dilute the effect of the penalty provision and be contradictory to public policy. Daney, 630 So.2d at 955. We disagree because the statute refers to the "loss" as the "amount of any claim due any insured." La. R.S. 22:658(A)(1). And since this statute is penal in nature, it must be strictly construed. Vaughn, 00-0291 at p. 15, 785 So.2d at 91. We also disagree that public policy is unserved by our interpretation because it punishes an insurer severely if it delays in paying a just claim, but punishes it less severely the more promptly it cures its sanctionable behavior. The statutory penalty serves the penal purpose; the "reasonable" attorney's fees recoverable, while penal in nature, are intended as reimbursement for the insured's legal expenses incurred in recovering the loss and penalty; not as a windfall. Accordingly, we find merit in State Farm's assignments of error. DECREE For the foregoing reasons, the judgment of the trial court is amended to reduce the amount of attorney fees assessed in favor of Sharon L. DeSoto and against State Farm Mutual Automobile Insurance Company to $2,500.00. In all other respects, the judgment is affirmed. Costs of this appeal are assessed equally against the parties to this appeal. AMENDED AND AFFIRMED AS AMENDED. NOTES [1] This amount represented the statutory 10% penalty based on the $10,000.00 UM limits in the State Farm policy and the medical payments due. [2] Prior to trial, USAgencies tendered its liability limits, deposited same into the registry of the court, and was dismissed from the lawsuit. State Farm in its capacity as the liability carrier for the defendant, Nidal Balbeisi, was also released from the litigation after settling with plaintiff. Plaintiff did not release Nidal Balbeisi and sought a judgment against him in excess of the coverage limits available under his liability policies. [3] Prior to awarding attorney's fees, the trial court acknowledged that Plaintiff and her attorney had entered into a 25% contingency fee contract.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1426364/	56 S.W.3d 120 (2001) Ian SHAPOLSKY, Anita Shapolsky, and Sure Seller, Inc., Appellants, v. Pete BREWTON, Appellee. No. 14-00-00714-CV. Court of Appeals of Texas, Houston (14th Dist.). June 28, 2001. Rehearing Overruled September 20, 2001. 125 Daniel Ward Jackson, Houston, Scott Rothenberg, Bellaire, for appellants. R. Christopher Bell, John Eric Carlson, Houston, for appellee. Panel consists of Justices YATES, WITTIG, and FROST. OPINION FROST, Justice. This is an interlocutory, accelerated appeal from the trial court's denial of special appearances filed by appellants, Ian Shapolsky, Anita Shapolsky, and Sure Seller, Inc. 126 I. FACTUAL AND PROCEDURAL BACKGROUND Appellee, Pete Brewton, is an investigative journalist. At the behest of national book publisher Simon & Schuster, he authored a political exposé entitled The Mafia, the CIA and George Bush. Brewton wanted the book published soon after its completion in July 1992, to coincide with the November 1992 presidential election. However, Simon & Schuster was unable to publish the book in 1992. Several other publishers approached Brewton to publish his book. Among them was Shapolsky Publishers, Inc. ("SPI"), a New York based specialty book publisher. When SPI confirmed that it could publish the book well before the 1992 election, Brewton began negotiations with its president, sole shareholder, and director, Ian Shapolsky. A. Brewton's Publishing Contract with SPI Brewton, who was then living in Austin, Texas, engaged in contract negotiations by telephone, fax, and mail with SPI (through Ian Shapolsky) in New York. Through these communications, Ian represented to Brewton that SPI had the resources to publish and market the book nationally. The parties' negotiations culminated in a publishing contract, which provided that SPI would use its best efforts to print, publish, and sell the book before election day. The only parties to this agreement were SPI and Brewton. After the parties had executed the publishing contract, Ian notified Brewton that SPI did not have the resources to print the book and that the printer would not extend credit for its publication. Without time to find another publisher who could meet the target publication date, Brewton agreed to make a short-term loan to SPI by advancing $44,500, half the cost to print and ship the book. From Texas, Brewton sent a cashier's check for $39,500 directly to the printer in Virginia, and sent a separate check for $5,000 to SPI for shipping costs. To document this loan, the parties entered into a second contract, entitled "Agreement between Mr. Peter Brewton & SPI Books-Shapolsky Publishers, Inc.," in which (1) SPI promised to repay the $44,500 within thirty days at a 12% per year interest rate and (2) the parties agreed to adjust the agreed royalty rates 10-15% upward in favor of Brewton. By the first week of October 1992, nearly 31,000 copies of the book had been printed, but few were actually available for sale in bookstores by election day. SPI spent less than $15,000 to promote and advertise Brewton's book, $5,500 of which Brewton advanced to pay for television and radio publicity. In December 1992, when the $44,500 loan repayment was already past due, SPI sent Brewton, in Texas, four post-dated checks totaling $30,000, in partial payment for Brewton's advance. Of this $30,000, a check for $10,000, drawn on a New York bank, failed to clear. SPI did not reimburse Brewton for the $5,500 publicity advance or for $9,000 (excluding interest) in advances he made for printing and shipping. Under the publishing contract, SPI was obligated to send Brewton, on or about July 31, 1993, a royalty check and a statement disclosing the number of books sold. Brewton received neither. A few days later, SPI filed for Chapter 11 bankruptcy protection in New York. B. Formation of Sure Seller, Inc. Within six weeks after SPI filed for bankruptcy, Ian's sister, Lisa Cohen, formed a new publishing company, Sure Seller, Inc. ("SSI"), which was incorporated in Florida. At some point, Haim Zitman 127 purchased 100% of SSI's authorized shares.[1] SSI's original formation documents list Cohen as the sole officer, director, subscriber, and registered agent. Anita Shapolsky, Ian's mother, served as SSI's secretary. Eventually, she became SSI's sole officer and director. SSI had the same address, telephone and fax number as Anita's art gallery in New York. C. Termination of Publishing Contract By stipulation, signed by the New York bankruptcy court, the official unsecured creditors committee, Brewton, and SPI, the publishing contract was terminated in October 1994. The hardcover rights to The Mafia, the CIA, and George Bush were to remain with SPI, who was expressly granted the right "to sell off any remaining inventory without any liability to account to Brewton under the contract or otherwise." The stipulation further provided that "Brewton is only entitled to royalties for books sold as of the date of this stipulation [October 18, 1994] and not after this date." D. SSI's Acquisition of SPI Assets In December 1994, Zitman and Anita entered into an asset acquisition agreement in which Anita agreed to loan about $110,000 to SSI to purchase, by highest bid from the bankruptcy trustee, assets from the SPI bankruptcy estate. Under this agreement, Anita was to recoup her advance for the purchase of the SPI assets and her legal expenses, plus 20%. Ian was to earn a salary for work he performed in liquidating the assets SSI purchased from the SPI bankruptcy estate. Any assets purchased from the bankruptcy estate that remained after the liquidation were to be divided, 90% to Anita and 10% to Zitman. In accordance with the agreement, SSI submitted a bid for assets of the SPI bankruptcy estate. In a court approved transaction, SSI purchased SPI's book inventory from SPI's bankruptcy estate. The New York bankruptcy court entered an "Order Approving Sale of Assets, Free and Clear of all Claims, Liens and Encumbrances." E. Sale of Brewton's Book in Texas In January 1996, SSI filled an order for three copies of Brewton's book for a Brenham, Texas bookstore. Enclosed with that order was a catalog from SSI offering a variety of books for sale, including The Mafia, the CIA, and George Bush. On May 2, 1999, five copies of Brewton's book were purchased from a Barnes & Noble bookstore in Austin, Texas. It is unclear from the record how or through whom Barnes & Noble acquired these books. F. Brewton's Claims in the Underlying Litigation Brewton sued Ian, Anita, and SSI in the Harris County District Court. The suit included claims for breach of contract, fraud, and violations of the Racketeer Influenced and Corrupt Organizations ("RICO") Act. See 18 U.S.C.A. § 1961, et seq. SPI was not made a party to the litigation. All three named defendants filed special appearances challenging the court's exercise of personal jurisdiction over them. The trial court sustained jurisdiction over all three, and they now appeal the denial of their special appearances. We affirm in part and reverse and remand in part. II. ISSUES PRESENTED FOR REVIEW In seven points of error, appellants complain that the trial court erred in overruling 128 their special appearances because each lacks the necessary contacts with Texas to establish either specific or general jurisdiction. In the first point of error, appellants assert that the trial court's order overruling Ian's special appearance, on the grounds that he (1) committed torts, in part, in Texas and (2) entered into a contract with Brewton, a Texas resident, to be partially performable in Texas, is incorrect as a matter of law and not supported by factually sufficient evidence. In their second and third points of error, appellants complain that the trial court's order overruling SSI's special appearance, on the grounds that (1) SSI sold copies of Brewton's book in Texas and that (2) SSI is a successor-in-interest to SPI, is incorrect as a matter of law and not supported by factually sufficient evidence. In their fourth through sixth points of error, appellants complain that the trial court's order overruling Anita's jurisdictional challenge on the grounds that (1) Anita waived her special appearance is incorrect as a matter of law and that (2) any finding that Anita is the alter ego of SPI and SSI is not supported by factually sufficient evidence. Finally, in their seventh point of error, appellants assert that the trial court's order overruling their special appearances is not based on factually sufficient evidence because none of them have the minimum contacts with Texas necessary to establish personal jurisdiction, either general or specific. This point will be discussed in the context of analyzing each appellant's contacts with this forum. III. STANDARD OF REVIEW Whether a Texas court may assert personal jurisdiction over a nonresident defendant is a question of law subject to a de novo review. C-Loc Retention Sys., Inc. v. Hendrix, 993 S.W.2d 473, 476 (Tex.App.-Houston [14th Dist.] 1999, no pet.). On appeal from a special appearance, we review the record[2] to determine if the nonresident defendant satisfied its burden to negate all possible grounds for personal jurisdiction. Abacan Technical Servs. Ltd. v. Global Marine Int'l Servs. Corp., 994 S.W.2d 839, 843 (Tex.App.-Houston [1st Dist.] 1999, no pet.) (citing Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex.1985)). Often, the trial court's determination of personal jurisdiction involves a resolution of underlying factual disputes. C-Loc, 993 S.W.2d at 476 (citing Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 411 (Tex. App.Houston [14th Dist.] 1997, no writ)). An appellate court reviews the propriety of that resolution for factual sufficiency by examining all the evidence in the record. Id. (citing Conner, 944 S.W.2d at 411). The reviewing court will reverse the trial court's decision for factual insufficiency only where that decision is "so against the great weight and preponderance of the evidence as to be manifestly erroneous or unjust." Cartlidge v. Hernandez, 9 S.W.3d 341, 346 (Tex.App.-Houston [14th Dist.] 1999, no pet.) (citing In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951); Runnells v. Firestone, 746 S.W.2d 845, 849 (Tex.App.-Houston [14th Dist.] 1988), writ denied, 760 S.W.2d 240 (Tex. 1988) (per curiam)). When the trial court denies a special appearance, the defendant may request findings of fact. Tex.R. Civ. P. 296; 129 Tex.R.App. P. 28.1. Where, as here, the trial court does not file findings, we view the trial court's judgment as impliedly finding all the facts necessary to support its judgment. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). Where a complete statement of facts appears in the record, however, these implied findings are not conclusive and an appellant may challenge the sufficiency of the evidence. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989).[3] Thus, in this case, we review the trial court's application of law de novo and review the facts for sufficiency. See M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 408 (Tex.App.-Corpus Christi 1999, no pet.). IV. PERSONAL JURISDICTION None of the appellants/defendants are residents of Texas. Texas courts may assert jurisdiction over a nonresident defendant only (1) where the Texas long-arm statute authorizes such exercise of jurisdiction and (2) where such exercise is consistent with the due process guarantees embodied in both the United States and Texas Constitutions. Cartlidge v. Hernandez, 9 S.W.3d 341, 346 (Tex. App.Houston [14th Dist.] 1999, no pet.) (citing CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex.1996) (orig.proceeding); TEX. CIV. PRAC. & REM.CODE ANN. § 17.042 (Vernon 1997)). Whether a Texas court may exercise personal jurisdiction over a nonresident defendant presents a question of law. James v. Ill. Cent. R.R. Co., 965 S.W.2d 594, 596 (Tex.App.-Houston [1st Dist.] 1998, no pet.). The Texas long-arm statute authorizes jurisdiction over a nonresident defendant "doing business" in Texas. § 17.042; Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991) (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 413-14, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984)). The Texas Civil Practice and Remedies Code characterizes nonresident activity as "doing business" in Texas where the nonresident: (1) contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state; (2) commits a tort in whole or in part in this state; (3) recruits Texas residents, directly or through an intermediary located in this state, for employment inside or outside this state; or (4) performs any other acts that may constitute doing business. § 17.042. The long-arm statute's "doing business" requirement is broad, limited only by the requirements of federal due process guarantees. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990) (citing U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.1977)); Daimler-Benz Aktiengesellschaft v. Olson, 21 S.W.3d 707, 714 (Tex.App.-Austin 2000, pet. dism'd w.o.j.). Therefore, where the exercise of personal jurisdiction comports with federal due process limitations, requirements of the Texas long-arm statute are satisfied. Guardian, 815 S.W.2d at 226 (citing Helicopteros, 466 U.S. at 413-14, 104 S. Ct. 1868). The federal due process clause protects, among other things, a person's liberty interest in not being subject to the binding judgments of a forum with which 130 the nonresident has established no meaningful contacts, ties, or relations. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S. Ct. 154, 90 L. Ed. 95 (1945)). With respect to personal jurisdiction, federal due process mandates (1) that the nonresident have purposefully established "minimum contacts" with the forum state; and (2) that the exercise of jurisdiction over the nonresident comport with "traditional notions of fair play and substantial justice." CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex.1996) (orig.proceeding) (quoting Int'l Shoe, 326 U.S. at 316, 66 S. Ct. 154 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 85 L. Ed. 278 (1940))). A nonresident establishes minimum contacts in Texas by purposefully availing itself of the privileges and benefits inherent in conducting business within the state. CSR, 925 S.W.2d at 594. In other words, the nonresident must purposefully invoke the benefits and protections afforded by the forum state's laws. Reyes v. Marine Drilling Cos., Inc., 944 S.W.2d 401, 404 (Tex.App.-Houston [14th Dist.] 1997, no writ) (citing Burger King, 471 U.S. at 474-75, 105 S. Ct. 2174; Guardian, 815 S.W.2d at 226). Requiring purposeful availment ensures that the nonresident's connections derive from its own purposeful conduct, and not the unilateral actions of the plaintiff or third parties. Guardian, 815 S.W.2d at 227-28 (citing Helicopteros, 466 U.S. at 417, 104 S. Ct. 1868; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980)). Personal jurisdiction, therefore, does not emerge from the nonresident's random, fortuitous, or attenuated contacts with the forum, or from another's acts. Id. at 226 (citing Burger King, 471 U.S. at 465, 105 S. Ct. 2174; Helicopteros, 466 U.S. at 417, 104 S. Ct. 1868; World-Wide, 444 U.S. at 298, 100 S. Ct. 559). Rather, the nonresident, itself, must take some action or engage in some conduct creating its own "substantial connection" with the forum state. Id. (citing Burger King, 471 U.S. at 474-75, 105 S. Ct. 2174). Although not a separate component, foreseeability is an important consideration in determining whether a nonresident's ties to a forum create a "substantial connection." C-Loc Retention Sys., Inc. v. Hendrix, 993 S.W.2d 473, 477-78 (Tex. App.Houston [14th Dist.] 1999, no pet.). The nonresident must reasonably anticipate being haled into a Texas court to answer for its injurious actions. Cartlidge v. Hernandez, 9 S.W.3d 341, 348 (Tex. App.Houston [14th Dist.] 1999, no pet.). If we conclude that minimum contacts with the forum state exist, we then evaluate those contacts in light of five factors to determine if the assertion of jurisdiction comports with traditional notions of fair play and substantial justice. Antonio v. Marino, 910 S.W.2d 624, 627 (Tex.App.-Houston [14th Dist.] 1995, no writ) (citing Guardian, 815 S.W.2d at 228). Those five factors are (1) the nonresident's burden; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining an efficient resolution of disputes; and (5) the states' common interest in furthering fundamental, substantive social policies. Id. A. General Jurisdiction A defendant's minimum contacts with the forum state can produce either general or specific jurisdiction. CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex.1996) (orig.proceeding). General jurisdiction arises when a nonresident defendant's contacts are "continuous and 131 systematic." Id. Therefore, general jurisdiction allows the forum state to exercise personal jurisdiction over the nonresident defendant, even if the cause of action did not arise from or relate to the nonresident's contacts with the state. Id. The general jurisdiction analysis is more demanding than the specific jurisdiction analysis as it requires a showing of substantial activity in the forum state. Id. The only evidence in the record regarding the extent, duration, or frequency of appellants' business dealings in Texas indicates their contacts were isolated. Nothing in the record supports the notion that any of the appellants engaged in any activity in this state that would rise to the level of "continuous and systematic" contacts. None of the appellants has any employees, officers, or agents in Texas or maintains any office, residence, or place of business in this state. None leases or owns real or personal property in Texas or maintains bank accounts, telephone numbers, or mailing addresses here. See M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 412 (Tex.App.-Corpus Christi 1999, no pet.) (finding no continuous and systematic contacts for exercise of general jurisdiction where (1) there was no evidence of the "extent, duration, or frequency of company's business dealings in Texas" and where (2) the company's officer never testified company had ever filed articles of incorporation in Texas; had agent here for service of process; owned, leased, or maintained real or personal property in Texas; paid income or property taxes in Texas; or maintained an office, residence, or place of business in Texas). Neither Ian nor Anita has any real ties to Texas. Although each of them traveled through Texas as tourists many years ago, neither has engaged in any continuous or systematic activities that would have any reasonably foreseeable consequences in Texas. SSI is a Florida corporation with its principal place of business in New York. Ian testified, without objection, that SSI, although a book distributor, did not distribute books in Texas, and never advertised in Texas, directed any commercial business toward Texas, or contracted with any Texas resident. However, the record shows that SSI filled a single order for a small number of books and sent them to Texas. In January 1996, SSI received and filled an unsolicited order for three copies of Brewton's book from a bookstore in Brenham, Texas. The bookstore owner, Lance Kuecker, signed an affidavit stating that when a customer requested a copy of Brewton's book, he called SSI in New York and placed the order. The book arrived C.O.D. at his bookstore via United Parcel Service. The package included an invoice for Brewton's and others' books and a catalog entitled "Sure Seller Books Holiday Catalogue 1996." The catalog listed a large number of books, including Brewton's book. According to Ian, SSI's sale to the Brenham bookstore was a "one time sale" in Texas, and SSI has never sold any other books in this state or purposely directed any commercial business toward Texas. However, the record contains evidence of other sales of Brewton's book in Texas. The special appearance evidence includes an affidavit signed by John F. Harrison, who states that in May 1999, he purchased five copies of Brewton's book at a Barnes & Noble bookstore in Austin, Texas. Each copy had a circled "S" on the outside bottom of the book, which is the logo for SSI. The record, however, does not reveal how or through whom Barnes & Noble acquired the books. Presence of the SSI logo, while indicating that the 132 books originated from SSI, does not establish that SSI sold these books directly in Texas or that SSI had any indication these books would ultimately be sold in Texas. Moreover, Harrison's affidavit testimony cannot be read, as Brewton suggests, to establish (1) that SSI sold the five copies of Brewton's book to the Barnes & Noble in Austin, much less (2) that SSI regularly sells books in Texas. We further note that this contact occurred after suit was filed and, therefore, is of questionable relevance in the jurisdictional analysis. See Am. Type Culture Collection, Inc. v. Coleman, 26 S.W.3d 37, 43 (Tex.App.-Houston [1st Dist.] 2000, no pet.) (observing that "[f]ederal authority indicates that contacts occurring after suit is filed are irrelevant...."); Scott v. Huey L. Cheramie, Inc., 833 S.W.2d 240, 242 (Tex.App.-Houston [14th Dist.] 1992, no writ) (implying that the relevant contacts are those up to the time of the injury). That leaves only the customer-driven sale at the bookstore in Brenham, delivered with an SSI advertisement. This one sale falls short of establishing a substantial connection between SSI and Texas and certainly does not qualify as the "continuous and systematic" activity necessary for a finding of minimum contacts from action or conduct SSI purposefully directed toward Texas. In sum, the record does not demonstrate any continuous and systematic contacts by any of the appellants in Texas sufficient to support a finding of general jurisdiction. We now consider whether the trial court's denial of appellants' special appearances is supported by specific jurisdiction. B. Specific Jurisdiction Specific jurisdiction emerges where the alleged liability "arises from or is related to" the nonresident's activity or contacts within the forum state. CSR, Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996) (orig.proceeding). A single contact with Texas, of substantial quality and nature, may be sufficient to establish specific jurisdiction when the cause of action arises from that contact. Mem'l Hosp. Sys. v. Fisher Ins. Agency, Inc., 835 S.W.2d 645, 650 (Tex.App.-Houston [14th Dist.] 1992, no writ). In conducting a specific jurisdiction analysis, we focus on the relationship among the defendant, the State of Texas, and the litigation. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990) (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414 n. 8, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984)). Where, as here, there are multiple defendants, we must test each defendant's actions and contacts with the forum separately. Gen. Elec. Co. v. Brown & Ross Int'l Distribs., Inc., 804 S.W.2d 527, 532 (Tex.App.-Houston [1st Dist.] 1990, writ denied) (citing Calder v. Jones, 465 U.S. 783, 790, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984)). 1. Ian Shapolsky Brewton's petition alleges: (1) Ian made intentional misrepresentations to Brewton, who was then in Austin, by phone, fax, and mail to induce him to sign a publishing contract with SPI; (2) Brewton relied on those false representations to his detriment, ceasing his business relationship with publisher Simon & Schuster; (3) such misrepresentations include (a) that SPI had the resources to print the book before the 1992 election; (b) SPI would market the book nationally; (c) the royalty rate payable to Brewton would be 10-15%; (4) Ian committed mail fraud, a predicate to civil racketeering, by causing SSI to mail copies of the book to Texas, for sale in Texas, without paying royalties to Brewton for the sales; and that (5) as a representative of SPI, Ian contracted with Brewton, and such contract was to be partially performed in Texas. 133 Because Brewton pled sufficient allegations[4] to bring Ian within reach of the Texas long-arm statute, we review the record to determine whether Ian has negated all bases of personal jurisdiction.[5]See M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 408 n. 2 (Tex.App.-Corpus Christi 1999, no pet.); see Nat'l Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 772 (Tex.1995) (orig.proceeding). For the reasons explained below, we find Ian failed to establish that he is not subject to the specific jurisdiction of Texas courts for torts allegedly committed in Texas. Ian has acknowledged that he negotiated the publishing contract and communicated with Brewton by phone and by mail in Texas. Moreover, Ian does not deny having made the statements Brewton alleges were false during these communications. The thrust of Ian's argument is that because he did these acts only in his capacity as an SPI officer, employee or agent, the "fiduciary shield doctrine" protects him from personal jurisdiction in Texas.[6] Ian misconstrues the nature of Brewton's suit. Ian is being sued, in part, for his own misrepresentations. It is the general rule in Texas that corporate agents are individually liable for fraudulent or tortious acts committed while in the service of their corporation. Hyman Farm Serv., Inc. v. Earth Oil & Gas Co., Inc., 920 S.W.2d 452, 455 (Tex.App.-Amarillo 1996, no writ) ("Under longstanding Texas law, corporate agents can be held individually liable for fraudulent or tortious acts committed while working for a corporation.") (citing Light v. Wilson, 663 S.W.2d 813, 815 (Tex. 1983); Holberg v. Teal Constr. Co., 879 S.W.2d 358, 360 (Tex.App.-Houston [14th Dist.] 1994, no writ)). Further, an officer of a corporation is always primarily liable for his own torts, even though the principal is also liable for those actions. State v. Mink, 990 S.W.2d 779, 783 (Tex.App.-Austin 1999, pet. denied) (citing with approval cases holding a corporate officer liable for torts committed by the corporation through him). However, the fact that Ian is alleged to have committed a tort in Texas is not dispositive because that, alone, does not give Texas courts jurisdiction over a nonresident. Hoppenfeld v. Crook, 498 S.W.2d 52 (Tex.Civ.App.-Austin 1973, writ ref'd n.r.e.). Rather, there must be a substantial connection between the contact and the cause of action in the forum state. See id. 134 In determining whether there is a substantial connection between the nonresident defendant and the State of Texas, we must consider "foreseeability." Guardian Royal Exch. v. English China, 815 S.W.2d 223, 227 (Tex.1991). Where a defendant sends false information into a state, knowing it will be relied upon by a resident of the forum state, there is a foreseeable consequence of direct economic injury to the resident at its domicile. Mem'l Hosp. Sys. v. Fisher Ins. Agency, Inc., 835 S.W.2d 645, 650 (Tex.App.-Houston [14th Dist.] 1992, no writ) (citing Brown v. Flowers Indus., Inc., 688 F.2d 328 (5th Cir.1982)). Therefore, if the alleged tortfeasor knows that the brunt of the injury will be felt by a particular resident in the forum, it must reasonably anticipate being haled into court there to answer for its actions. Calder v. Jones, 465 U.S. 783, 790, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984). In negotiating with Brewton, Ian is alleged to have made material misrepresentations, oral and written, on which Brewton relied. When Ian made the allegedly false statements to Brewton, via telephone and written communications, he knew Brewton was in Texas, and it was foreseeable that Brewton would rely upon the information he provided. See Mem'l Hosp., 835 S.W.2d at 650. Brewton claims that in reliance on the information, he elected to forego potential publishing opportunities with other publishers to sign a publishing agreement with SPI. Furthermore, by sending allegedly false information into Texas, causing economic injury in Texas, Ian purposefully availed himself of the benefits and protections of Texas law. See id. at 651; see also Flowers, 688 F.2d at 330 (finding a single defamatory telephone call from out-of-state, analyzed as tortious conduct outside the state causing injury in the state, sufficient for due process purposes). The injurious effect in Texas of the torts Ian allegedly committed could have been foreseen. Similarly, there is a strong nexus in this case between the torts Ian is alleged to have committed in Texas and the contacts with Texas, i.e., it is these specific contacts which give rise to the claims Brewton asserts against Ian. Thus, we find Ian's alleged actions constitute sufficient purposeful minimum contacts with Texas to satisfy due process. See Portland Sav. & Loan Ass'n v. Bernstein, 716 S.W.2d 532 (Tex.App.-Corpus Christi 1985, writ ref'd n.r.e.) (finding a nexus between phone calls and allegations of misrepresentation); Rowland & Rowland, P.C. v. Tex. Employers Indem. Co., 973 S.W.2d 432, 435-36 (Tex.App.-Austin 1998, no pet.) (finding a significant contact in nonresident's letter to Texas resident which contained misrepresentations at issue in that case). Accordingly, we must now determine whether the assertion of jurisdiction in this case would offend traditional notions of fair play and substantial justice. Schlobohm v. Schapiro, 784 S.W.2d 355, 359 (Tex.1990). Once a court determines that the nonresident defendant has purposefully established minimum contacts with the forum state, only in rare cases will the exercise of jurisdiction not comport with fair play and substantial justice. Guardian Royal Exch. v. English China, 815 S.W.2d 223, 231 (Tex.1991). This case is no exception. We find that the exercise of jurisdiction over Ian by the courts of this state will not offend traditional notions of fair play and substantial justice. First, that Ian does not reside in Texas is not persuasive in deciding personal jurisdiction. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) (stating it is an inescapable fact of modern commercial life that 135 a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating need for physical presence within the state in which business is conducted). The State of Texas has a strong interest in the regulation of commercial transactions entered into by its citizens and in providing a forum in which disputes involving its citizens can be resolved. This interest in litigation becomes even stronger when, as here, the tort is alleged to have been committed in whole or in part in Texas. We hold that Ian has not met his burden of showing that under the facts of this case, the exercise of personal jurisdiction over him individually offends traditional notions of fair play and substantial justice. Because we find personal jurisdiction over Ian on tort grounds, we need not address whether Texas may exert personal jurisdiction over Ian for allegedly contracting with a Texas resident. See, e.g., Puri v. Mansukhani, 973 S.W.2d 701, 708 (Tex. App.Houston [14th Dist.] 1998, no pet.) (stating nonresident defendant must negate all bases of personal jurisdiction to prevail in a special appearance). Accordingly, we overrule appellants' first point of error and also overrule appellants' seventh point of error, as to Ian. 2. SSI Brewton maintains that the trial court properly concluded that it could assert personal jurisdiction over SSI under any of three theories: (1) SSI committed mail fraud, a predicate act of civil racketeering, when it sold copies of Brewton's book in Texas without paying him; (2) SSI sold copies of Brewton's book in Texas; and (3) SSI is a successor-in-interest to SPI. The first two theories are based on SSI's own contacts with this state. The third is based on Brewton's theory that SSI is legally responsible for the actions and omissions of SPI. SSI contends that finding jurisdiction on any of these bases is incorrect as a matter of law and not supported by factually sufficient evidence. a. SSI's Own Contacts With Texas SSI argues that the evidence in the record does not establish that SSI, apart from any connection with SPI, had the minimum contacts with Texas necessary to establish personal jurisdiction. Brewton counters that he presented evidence showing that (1) SSI sold copies of Brewton's book in Texas in 1996 and in 1999, including by mail,[7] without paying Brewton royalties, and (2) SSI advertised Brewton's book for sale in Texas. As previously noted, the record contains no definitive evidence that books sold at the Barnes & Noble store came directly from SSI, or that SSI purposefully directed them to Texas. The only evidence of any sales activity by SSI in Texas is the unsolicited sale of three books to the Brenham bookstore, which were delivered with an SSI catalog. Because SSI had no contract with Brewton and no obligation to pay him royalties for the sale of any books, there is no conduct associated with the sale of these three books, or the delivery of the accompanying catalog, that could support a finding of specific jurisdiction over SSI. Brewton's reliance on his assertion that mail fraud, as a predicate act to his RICO action, is conduct sufficient to support specific jurisdiction over SSI is also misplaced. Notably, Brewton's pleadings do not assert that SSI engaged in any of the actions alleged to constitute a violation of RICO, nor does Brewton assert SSI 136 engaged in the predicate act of mail fraud.[8] Because the pleadings asserting the RICO claims allege no conduct by SSI associated with book sales in Texas, no cause of action against SSI arises from that contact. It is the non-resident's purposeful conduct, not the activity of the plaintiff or others, that must have caused the contact. See Guardian Royal Exch., 815 S.W.2d at 227. Moreover, to sustain specific jurisdiction, the litigation must result from the alleged injuries that arise out of or relate to those activities. Nat'l Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 774 (Tex.1995). We conclude SSI's contacts with the forum were fortuitous and attenuated and that the record fails to establish the requisite "strong nexus" between these contacts and the claims Brewton asserts against SSI in this litigation to support specific jurisdiction. See McDermott v. Cronin, 31 S.W.3d 617, 622 (Tex.App.-Houston [1st Dist.] 2000, no pet.). To the extent the trial court's denial of SSI's special appearance was based on a finding that SSI maintained sufficient minimum contacts to sustain specific jurisdiction, that ruling is not supported by factually sufficient evidence. b. SSI's Contacts through SPI We now consider whether SSI is subject to personal jurisdiction as an alleged successor-in-interest to SPI, through SPI's contacts with Texas. Brewton argues that, through SSI's purchases of SPI's book inventory from the bankruptcy trustee, SSI became a successor-in-interest to SPI.[9] Under a successor corporation liability theory, a nonresident defendant corporation not otherwise subject to personal jurisdiction in the forum state becomes so by virtue of succeeding to a corporation that was subject to personal jurisdiction in the forum state. In re Celotex Corp., 124 F.3d 619, 628 (4th Cir.1997). Before addressing Brewton's successor liability theory as a basis for specific jurisdiction, we first note that SSI did not acquire any SPI stock or agree to assume any liabilities of SPI, nor were the two companies consolidated by formal corporate merger. Brewton's successor liability theory is based entirely on the fact that SSI acquired certain assets of SPI's bankruptcy 137 estate, a transaction which, as previously noted, was accomplished via a court-approved sale. The Texas Business Corporations Act governs the liability of an acquiring corporation. It provides that the purchase of all or substantially all of the property or assets of the seller corporation "does not make the acquiring [entity] responsible or liable for any liability or obligation of the selling corporation unless the acquiring entity expressly assumes the liability or obligation, or unless another statute expressly provides to the contrary." Lockheed Martin Corp. v. Gordon, 16 S.W.3d 127, 134-35 (Tex.App.-Houston [1st Dist.] 2000, pet. denied) (citing Tex. Bus. Corp. Act Ann. art. 5.10(B)(2) (Vernon Supp.2001) (emphasis added));[10]see Mudgett v. Paxson Mach. Co., 709 S.W.2d 755, 758 (Tex.App.-Corpus Christi 1986, writ ref'd n.r.e.). Brewton acknowledges this is the rule in Texas, but argues that two exceptions to this rule apply in this case: (1) where the purchasing corporation is a "mere continuation" of the selling corporation, and/or (2) where the transaction is entered into fraudulently to escape liability. i. "Mere Continuation" Exception Brewton cites W. Res. Life Ins. Co. v. Gerhardt in support of his argument that "mere continuation" is an exception to limited successor liability. See 553 S.W.2d 783, 786 (Tex.Civ.App.-Austin 1977, writ ref'd n.r.e.). In Gerhardt, the court applied the de facto merger doctrine to find that the purchaser of another company's assets assumed the selling corporation's tort liability. Id. at 787. However, the Texas Legislature rejected application of the de facto merger doctrine when it amended article 5.10 in 1979. The purpose of the amendment was to "preclude the application of de facto merger in any sale, lease, exchange or other disposition of all or substantially all the property and assets of a corporation...." Tex. Bus. Corp. Act Ann. art. 5.10 cmt. The amendment added section B, which provides: A disposition of any, all, or substantially all, of the property and assets of a corporation, whether or not it requires the special authorization of the shareholders of the corporation, effected under Section A of this article ... or otherwise ...: (1) is not considered to be a merger or conversion pursuant to this Act or otherwise; and (2) except as otherwise expressly provided by another statute, does not make the acquiring corporation ... responsible or liable for any liability or obligation of the selling corporation that the acquiring corporation... did not expressly assume. Id. Art.. 5.10(B); see also Suarez v. Sherman Gin Co., 697 S.W.2d 17, 20 (Tex. App.-Dallas 1985, writ ref'd n.r.e.) (finding "the legislature's prompt action to override Gerhardt and statutorily preclude application of the de facto merger doctrine in Texas clearly states a public policy opposed to the doctrine."). In Mudgett v. Paxson Mach. Co., the Corpus Christi Court of Appeals rejected the "mere continuation" theory as contrary to the legislative intent of article 5.10(B). 709 S.W.2d 755, 758 (Tex.App.-Corpus Christi 1986, writ ref'd n.r.e.) (determining, in a successor liability case, whether an asset "purchase constituted a `de facto 138 merger or [a] continuation under the doctrine of successor liability.'"). The Mudgett court reasoned that "mere continuation" was an even more liberal means of imposing liability upon the acquiring corporation in a purchase of assets transaction than is the de facto merger doctrine the Legislature expressly rejected. Id. The court concluded, "[c]ertainly if the de facto merger doctrine is contrary to the public policy of our state, so must be the mere continuation doctrine." Id. The court declined to impose liability upon an acquiring corporation under either theory "in the face of clear legislative intent to the contrary." Id. Mindful of the legislative intent behind article 5.10, we find that just as SPI's liability may not be transferred to SSI under a "mere continuation" theory, neither may SPI's contacts be attributed to SSI for purposes of establishing personal jurisdiction. ii. Fraudulent Transfer Exception Brewton argues that Texas recognizes an exception to article 5.10's limitation of liability for a purchasing corporation where the transfer of assets in the sale was fraudulent.[11] In support, Brewton relies on Phippen v. Deere & Co., 965 S.W.2d 713, 726 (Tex.App.-Texarkana 1998, no pet.), a case in which the defendant/purchaser complained that there was insufficient evidence for the jury's finding that he was liable under a theory of successor liability for the debts of the predecessor corporation, because the defendant's purchase of motor homes was a "fraudulent endeavor by the original corporation to escape liability." Id. The trial court had instructed the jury that the defendant/purchaser was liable for such obligations if: (1) the predecessor and defendant/purchaser had engaged in a fraudulent transaction in an effort to escape liability; or if (2) defendant/purchaser was a mere continuation of the seller. Id. The court in Phippen concluded that the record was sufficient to show that the defendant/purchaser and the motor home seller had engaged in a fraudulent transaction to escape liability and that the evidence was sufficient to show that the defendant/purchaser was a "mere continuation" of the seller. Id. The court then found that either of these circumstances was enough to support the jury's finding that the defendant/purchaser was liable for the seller's obligations. Id. Notably, the only case the Phippen court cited in its analysis was Gerhardt, which was effectively superseded by the amendment to article 5.10. Id. at 725-26. Other states recognize as many as four exceptions to the rule of successor non-liability.[12] However, the "Business Corporation 139 Act controls in Texas." Lockheed Martin Corp. v. Gordon, 16 S.W.3d 127, 135 and n. 6 (Tex.App.-Houston [1st Dist.] 2000, pet. denied) (pointing out that the Texas Legislature rejected the third and fourth exceptions of the Restatement; stating "Article 5.10(B)(1) eliminates the `de facto merger' doctrine, the third exception under the Restatement"; and citing Mudgett, which rejected the "mere continuation" theory, the fourth exception recognized by the Restatement, as contrary to the legislative intent of article 5.10(B)); see also McKee v. Am. Transfer & Storage, 946 F. Supp. 485, 486-87 (N.D.Tex. 1996) (Texas law does not generally recognize successor liability for subsequent purchases of corporate assets.); Mudgett v. Paxson Mach. Co., 709 S.W.2d 755, 756-59 (Tex.App.-Corpus Christi 1986, writ ref'd n.r.e.) ("The Texas Business & Corporations Act eliminates the doctrine of implied successor liability."). Article 5.10 expressly delineates the two exceptions to successor non-liability which apply in the context of an asset purchaser. The first arises where the purchaser expressly assumes the seller's liabilities. The second comes into play where an exception is "expressly provided by another statute." The first exception clearly does not apply because SSI never agreed to assume SPI's liabilities or obligations. The second exception is also inapplicable. Brewton does not cite, nor does our research reveal, any other statute which expressly provides an exception to the rule of successor non-liability for purchasers of all or substantially all of a corporation's assets. We find that SSI has no successor liability by virtue of its purchase and subsequent handling of SPI's book inventory, and even assuming that Texas could assert personal jurisdiction over SPI, we find that Texas courts may not assert personal jurisdiction over SSI on the basis of its purchase of SPI's book inventory. The second and third points of error are sustained. 3. Anita Shapolsky Appellants' fourth through seventh points of error assert that the trial court erred in finding that Anita is subject to jurisdiction in Texas. Brewton argues that Texas courts may assert jurisdiction over Anita because (1) she has waived her special appearance (contested in appellants' sixth point of error), and alternatively (2) she is an alter ego of both SPI and SSI (contested in appellants' fourth, fifth and seventh points of error). Brewton asserts that Anita Shapolsky waived her special appearance by, inter alia, filing a motion for protection and for sanctions before her special appearance was decided. Anita filed this motion, together with a notice of oral hearing, set for February 12, 1998, on February 4, 1998. In the motion, Anita requested that the court (1) restrain Brewton from entering the law offices of appellants'/defendants' attorney, Emmons & Associates; and (2) sanction Brewton $2,000.[13] The trial court 140 signed an order denying this motion, at least insofar as the trespass allegations, which formed the basis for a request for a restraining order, on March 17, 1998.[14] Appellant's special appearance was not denied until June 1, 2000. An objection to a Texas court's exercise of jurisdiction over a nonresident must be made by special appearance filed under Rule 120a of the Texas Rules of Civil Procedure. See Tex.R. Civ. P. 120a(2). Rule 120a "requires strict compliance." Morris v. Morris, 894 S.W.2d 859, 862 (Tex. App.Fort Worth 1995, no writ). A special appearance must be made and determined on sworn motion prior to any other plea, pleading, or motion that seeks affirmative relief. Tex.R. Civ. P. 120a(1)-(2); Dawson-Austin v. Austin, 968 S.W.2d 319, 323 (Tex.1998) (noting that the test for a general appearance is whether party requests affirmative relief inconsistent with assertion that the district court lacks jurisdiction). Any appearance before judgment, which is not in compliance with Rule 120a, constitutes a general appearance. Tex.R. Civ. P. 120a(1); Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 201 (Tex.1985); see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n. 14, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) ("[T]he personal jurisdiction requirement is a waivable right."). When a party generally appears, the trial court can exercise jurisdiction over the party without violating the party's due process rights. Kawasaki, 699 S.W.2d at 201. A party contesting jurisdiction must not seek affirmative relief on any question other than that of the court's jurisdiction before the special appearance is determined. Tex.R. Civ. P. 120a(2) (providing that a special appearance "shall be heard and determined before ... any other plea or pleading may be heard."). Any intervening appearance to invoke the trial court's judgment about a "question other than the court's jurisdiction" is a general appearance. Angelou v. African Overseas Union, 33 S.W.3d 269, 275 (Tex. App. Houston [14th Dist.] 2000, no pet.). Anita's motion for protection and for sanctions states that it was "subject to ... her previously filed special appearance." However, in this motion, Anita argued issues unrelated to her special appearance prior to obtaining a ruling on the special appearance. She sought affirmative relief from the court when she requested a temporary restraining order and when she requested sanctions that were at least partially unrelated to discovery. See Tex.R. Civ. P. 120a(2) ("Any motion to challenge the jurisdiction provided for herein shall be heard and determined before a motion to transfer venue or any other plea or pleading may be heard.") (emphasis added); Liberty Enters., Inc. v. Moore Transp. Co., Inc., 690 S.W.2d 570, 571-72 (Tex.1985) (finding that party waived special appearance with affirmative action agreeing to the trial court's order reinstating the cause of action); Landry v. Daigrepont, 35 S.W.3d 265, 267-68 (Tex.App.-Corpus Christi 2000, no pet.) (finding that party waived his special appearance by approving the order granting the new trial before the special appearance was determined). In light of this finding of waiver, appellant's sixth point of error is overruled. Accordingly, because we find that Anita waived her special appearance, we need not address whether Texas may assert personal jurisdiction over Anita under an "alter-ego" theory, as asserted in appellants' *141 fourth, fifth, and seventh points of error. V. Conclusion We affirm the trial court's denial of Ian Shapolsky's special appearance because he did not successfully negate specific jurisdiction. We affirm the trial court's denial of Anita Shapolsky's special appearance because, in seeking affirmative relief from the trial court before the determination of her special appearance, she made a general appearance and waived her jurisdictional challenge. Finally, we reverse the trial court's denial of SSI's special appearance because SSI successfully negated all bases of personal jurisdiction, and remand this case with instructions to dismiss the claims against SSI for lack of personal jurisdiction. NOTES [1] Zitman later sold 85% of his SSI stock to Joseph Benjamin Investment Corporation. [2] The trial court determines the special appearance "on the basis of the pleadings, any stipulations made by and between the parties, such affidavits and attachments as may be filed by the parties, the results of discovery processes, and any oral testimony." Tex.R. Civ. P. 120a(3). [3] See Hotel Partners v. Craig, 993 S.W.2d 116, 122 (Tex.App.-Dallas 1994, writ denied) ("The record before us contains no statement of facts from the hearing on the competing motions. Consequently, we assume the trial court made all necessary findings to support its ruling."). [4] Ian argues that (1) Brewton "failed to assign a single potential tort claim against Ian in his special appearance briefing and special appearance evidence" and (2) Ian gave "compelling, thorough, and unobjected to testimony as to lack of tortious conduct." Our review of the record reveals that Brewton's live pleading alleges tort claims against Ian. [5] "Without jurisdictional allegations by the plaintiff that the defendant has committed any act in Texas, the defendant can meet its burden of negating all potential bases of jurisdiction by presenting evidence that it is a nonresident." Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 634 (Tex.App.-Dallas 1993, writ denied) (citing Siskind v. Villa Found. for Educ., Inc., 642 S.W.2d 434, 438 (Tex.1982)). [6] The fiduciary shield doctrine provides that corporate officers are not subject to jurisdiction in a foreign forum if their actions are taken in a representative capacity. Brown v. Gen. Brick Sales Co., Inc., 39 S.W.3d 291, 297-98 (Tex.App.-Fort Worth 2001, no pet.) (citing Amoco Chem. Co. v. Tex. Tin Corp., 925 F. Supp. 1192, 1201 (S.D.Tex.1996)). In the cases applying the doctrine, the courts limited its application to jurisdictional claims based on the theory of general jurisdiction as opposed to specific jurisdiction. Id. at 300. Moreover, the fiduciary shield doctrine has not been explicitly adopted by the Texas Supreme Court. Id. [7] Mail fraud is alleged as a predicate act to Brewton's RICO action. [8] In his pleading, Brewton claims only the individual defendants, which he identifies as "Ian Shapolsky, Anita Shapolsky, and Lisa Cohen Goldberg ... committed mail fraud, a predicate act, by intentionally and knowingly causing [SSI] and Sure Seller Books, Inc. to transmit by mail Brewton's book to Texas for sale and by receiving funds from such sale in Texas without paying any royalty to Brewton, all in violation 18 U.S.C. § 1841 and 18 U.S.C. § 1961(1)(B)." [9] Generally successors are not liable for the torts of their predecessors. In Panther Pumps & Equip. Co., Inc. v. Hydrocraft, Inc., 566 F.2d 8 (7th Cir.1977), the Seventh Circuit Court of Appeals summarized the traditional rule of successor liability, stating: The well settled rule of American jurisdictions... is that a corporation which purchases the assets of another corporation does not, by reason of succeeding to the ownership of property, assume the obligations of the transferor corporation.... Exceptions to this rule exist where (a) the purchasing corporation expressly or impliedly agrees to assume the liabilities of the seller, (b) the transaction amounts to a consolidation or merger of the two companies, (c) the purchasing corporation is merely a continuation of the selling corporation, or (d) the transaction is entered into fraudulently to escape liability. Id. at 24-25. If a court has personal jurisdiction over the predecessor-in-interest, once successor liability is established, personal jurisdiction over the successor-in-interest necessarily exists. This result follows because the acts of the predecessor-in-interest are imputed to the successor. Select Creations, Inc. v. Paliafito Am., Inc., 852 F. Supp. 740, 765 (E.D.Wis.1994). [10] "Texas strongly embraces the non-liability rule. To impose liability for a predecessor's torts, the successor corporation must have expressly assumed liability." Tex. Bus. Corp. Act art. 5.10(B)(2). The statute protects both Texas corporations and foreign corporations. Lockheed, 16 S.W.3d at 139. [11] Brewton argues he presented special appearance evidence which shows that the asset transfer was a "sham" perpetrated by Anita Shapolsky on the bankruptcy court and that after SPI declared bankruptcy, "the Shapolskys were `doing business as usual' under the Sure Seller [SSI] name." Brewton also contends that appellants presented no evidence to refute Brewton's claim of this "sham transaction." [12] The Third Restatement of the Law of Torts for Products Liability, states the majority rule as follows: [A] successor business that purchases only the assets of another business is not subject to liability for harm caused by defective products sold commercially by the predecessor unless: (1) in acquiring the assets, the successor agrees to assume liability; (2) the acquisition results from a fraudulent conveyance to escape liability or the debts or liabilities of the predecessor; (3) the acquisition constitutes a consolidation or merger with the predecessor; or (4) the acquisition results in the successor becoming a continuation of the predecessor. Lockheed Martin Corp. v. Gordon, 16 S.W.3d 127, 134 (Tex.App.-Houston [1st Dist.] 2000, pet. denied). [13] Anita's motion also requested that the court order Brewton to (1) pay the $500 in sanctions the court previously awarded for a violation of Rule 21, because the amount ordered remained outstanding; and (2) pay another $500 for failure to pay the $500 sanction award. It is unclear whether Anita's request for $2,000 in additional sanctions was solely for Brewton's alleged unauthorized entry into Anita's counsel's law offices or whether the request for $2,000 in sanctions includes the $1,000 in sanctions Brewton requested for failure to pay the $500 sanction award for violation of Rule 21. Regardless, it is clear that Anita sought at least $1,000 in sanctions for Brewton's alleged unauthorized entry. [14] The trial court's case inquiry sheet shows that the court denied Anita's motion on February 12, 1998, the date for which she had noticed the hearing.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1498611/	201 S.W.3d 82 (2006) STATE of Missouri, Respondent, v. Lamont ROWAN, Appellant. No. ED 87067. Missouri Court of Appeals, Eastern District, Division Four. September 12, 2006. 83 Craig A. Johnston, Columbia, MO, for Appellant. Jeremiah W. (Jay) Nixon, Atty. Gen., Victor J. Melenbrink, Jefferson City, MO, for Respondent. ROY L. RICHTER, Presiding Judge. Lamont Rowan claims the trial court erred in refusing to consider or allow evidence of Rowan's postsentencing good behavior before imposing judgment and sentence after remand. We reverse and remand for resentencing. I. BACKGROUND Rowan was charged with committing murder in the first degree. After a jury trial in the Circuit Court of the City of St. Louis before Judge David C. Mason, Rowan was found guilty of the lesser included offense of murder in the second degree. At sentencing, defense counsel asserted that Rowan would only have to serve 85% of his life sentence. The trial court disagreed, contending that there was no 85% of life and imposed a life sentence. Rowan appealed. This court reversed and remanded, holding that at the time of sentencing the trial court was mistaken about the amount of time that Rowan would serve in prison before being eligible for parole. At sentencing on remand, defense counsel attempted to introduce evidence of Rowan's good behavior in prison. Judge Mason refused to consider such evidence, asserted it was irrelevant, and once again sentenced Rowan to life imprisonment. The following day, at another hearing, 84 Judge Mason declared that his statements regarding the inadmissibility of postsentencing behavior at resentencing were in error. Because the court's jurisdiction ended after its sentence pronouncement, the trial court refused to indicate how it would have ruled had it heard evidence of Rowan's good behavior. Rowan appeals. II. DISCUSSION A trial court has broad discretion in admitting evidence and its decisions will be affirmed on appeal unless it abused its discretion. State v. Morrow, 968 S.W.2d 100, 106 (Mo. banc 1998). An abuse of discretion occurs when the trial court's decision is clearly against the logic of the circumstances and "is so unreasonable and arbitrary that it shocks the sense of justice and indicates a lack of careful, deliberate consideration." Hancock v. Shook, 100 S.W.3d 786, 795 (Mo. banc 2003). In addition, in matters concerning the admission of evidence, we "review for prejudice, not mere error," and will reverse only if the error was so prejudicial that it deprived the defendant of a fair trial. State v. Warren, 141 S.W.3d 478, 491 (Mo.App. E.D.2004). Rowan argues that the trial court committed reversible error when it refused to consider evidence of Rowan's good behavior in prison in making its resentencing decision. It is recognized that a court in making a sentencing decision has discretion to consider a variety of factors. The United States Supreme Court has held that information unfavorable to a defendant including postsentence behavior may be considered by a court subject to limitations prohibiting retaliatory vindictiveness. See North Carolina v. Pearce, 395 U.S. 711, 725-26, 89 S. Ct. 2072 (1969); State v. Burkemper, 882 S.W.2d 193, 198 (Mo.App. E.D.1994). In addition, other jurisdictions have reasoned that a resentencing judge has authority to similarly consider favorable information about a defendant's good behavior subsequent to his original sentencing. See Com. v. White, 436 Mass. 340, 764 N.E.2d 808, 812 (2002); State v. Carter, 208 Wis. 2d 142, 560 N.W.2d 256 (1997). The trial court was therefore permitted to consider Rowan's postsentencing behavior in its resentencing decision. Consequently, the only issue before this court is whether the trial court's error prejudiced Rowan. We hold that it did. In Wraggs v. State, 549 S.W.2d 881, 884 (Mo. banc 1977), after two prior convictions were converted into a single shorter term conviction, the court concluded that resentencing was appropriate due to these changed circumstances. This change placed "appellant in a significantly different position than what he was" at sentencing. In addition, the court noted that it was "not for [it] to say that this change would not influence, although not compel, a sentencing judge to render a lesser sentence." Id. at 886. Here, Rowan has similarly been placed in a different position in light of excluded evidence. After asserting that Rowan's good behavior in prison was not legally relevant, the trial court sentenced Rowan, and then later recanted its earlier statements. Having lost jurisdiction over the case by rendering a sentence, the trial court admitted it was very wrong on the law and declined to reveal how it would have ruled had it heard evidence of Rowan's good behavior. As stated in Wraggs, it is not for us to say that this change would not affect the trial court's decision on sentencing. Consequently, it is appropriate that this case be remanded for resentencing. The trial court has the authority to reimpose the original sentence if it chooses to do so. *85 III. CONCLUSION The judgment of the trial court is reversed and the case is remanded for re-sentencing. MARY K. HOFF, J., Concurs. SHERRI B. SULLIVAN, J., Concurs.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2349136/	229 S.W.3d 358 (2007) Eric L. MILLER, Appellant, v. RAYTHEON AIRCRAFT COMPANY, Raytheon Travel Air, and Flight Options, L.L.C., Appellees. No. 01-05-00787-CV. Court of Appeals of Texas, Houston (1st Dist.). April 19, 2007. 363 John Albert Sullivan III and Robert J. Filteau, Filteau & Sullivan, P.C., Houston, TX, for Appellant. Charles B. Hampton and Timothy Scott McConn, Andrews & Kurth, L.L.P., Houston, TX, for Appellees. Panel consists of Chief Justice RADACK and Justices JENNINGS and BLAND. OPINION JANE BLAND, Justice. In this wrongful discharge case, Eric Miller, an airplane pilot, appeals summary judgments entered in favor of appellees Raytheon Aircraft Company (RAC), Raytheon Travel Air (RTA), and Flight Options, L.L.C. (FOC). Miller contends (1) summary judgment was improper on his 364 wrongful discharge claims under the Sabine Pilot[1] exception to the employment-at-will doctrine, and the trial court erred in considering hearsay in a summary judgment affidavit, (2) his wrongful discharge claims are not preempted by the Airline Deregulation Act of 1978,[2] (3) summary judgment on his breach of contract claims was improper because he was not an at-will employee, and (4) summary judgment was improper on his common law tort, conspiracy, and unpaid wages claims. We conclude that RAC and RTA established that they terminated Miller's employment for a reason other than his refusal to perform illegal acts, negating the causation required for a Sabine Pilot claim as a matter of law. We further conclude that the Airline Deregulation Act of 1978 preempts Miller's Sabine Pilot wrongful discharge claim against FOC. Finally, the trial court properly granted summary judgment on Miller's breach of contract and common law claims. We therefore affirm the trial court's orders granting summary judgment. Facts and Procedural History RAC hired Miller in December 1997 and assigned him to work for RTA as a pilot. RTA was a fractional aircraft ownership business in which customers would buy a share of an aircraft and pay a monthly management fee. Buying a share of an aircraft entitled the customer to a certain number of flight hours per year. RTA managed the aircraft, which included providing pilots, crew, maintenance, fuel, catering, and scheduling services. In December 2001, RTA formed a joint venture with Flight Options, Inc. (FOI), an RTA competitor. The venture established a new company called Flight Options, L.L.C. (FOC). FOC also engages in a fractional aircraft ownership business and operates RTA's former fleet of aircraft. RTA initially owned a forty-nine percent interest in FOC, but currently owns a greater than fifty percent interest. As part of the transaction, RTA ceased flight operations upon the effective date of the agreement. Miller worked for RAC and RTA until the FOC joint venture commenced on April 1, 2002, whereupon Miller began working for FOC. On April 4, just four days after Miller began work, FOC fired Miller, providing as a basis for its decision that it had received complaints that he had been abusive to a female flight attendant, and that he had unnecessarily slowed down an equipment upgrade. In this lawsuit, Miller alleges that he was fired for a different reason. According to Miller's affidavit, as a pilot, he was responsible for ensuring that any aircraft he was assigned to fly was fit for service in accordance with the RTA Flight Operations Manual and Federal Aviation Administration (FAA) regulations. Generally, FAA regulations require that all systems and components on an aircraft be operative. An aircraft, however, may nonetheless be dispatched for a flight, or may continue a flight, with certain systems and components inoperative, provided the aircraft has an approved Minimum Equipment List (MEL), and is operated in accordance with the procedures and limitations prescribed by the MEL. Miller alleges that throughout his employment at RAC and RTA, his superiors requested and pressured him to continue flight operations with aircraft that had maintenance problems that required their grounding in accordance 365 with their published MELs. Miller further alleges that he was fired because he refused to fly these aircraft, citing five occasions when he grounded aircraft that did not meet MEL standards. In addition to a Sabine Pilot wrongful discharge claim, Miller seeks recovery for breach of employment contract, promissory estoppel, fraud, negligent misrepresentation, civil conspiracy, intentional infliction of emotional distress, negligence, and wage and hour violations. Wrongful DischargeRAC and RTA A. Affidavit of William Wallisch At the outset, Miller contends the trial court abused its discretion in denying his motion to strike the affidavit of William Wallisch, an RTA Vice President, in its entirety. The trial court struck the portion of Wallisch's affidavit that stated that Miller's employment with RTA was "at-will," but refused to strike the remainder of the affidavit. Miller contends that the affidavit fails to demonstrate that Wallisch is competent to offer testimony concerning Miller's employment status. Miller also contends that Wallisch's statement in the affidavit referencing an un-appended combination agreement constitutes hearsay. Miller directs us to Texas Rule of Civil Procedure 166a(f), which provides: "Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." TEX.R. CIV. P. 166a(f). We review a trial court's decision to admit or exclude summary judgment evidence for an abuse of discretion. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex.1998); United Blood Servs. v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997). The standards for the admissibility of evidence in a summary judgment proceeding are the same as those applicable to a regular trial. Longoria, 938 S.W.2d at 30. In an abuse of discretion review, we consider whether the trial court acted arbitrarily or unreasonably, or without reference to guiding rules and principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). To warrant a reversal, the trial court's error must have probably caused rendition of an improper judgment. TEX.R.APP. P. 44.1(a)(1). 1. Competence Miller contends Wallisch's affidavit failed to demonstrate that he was competent to offer testimony concerning Miller's employment status. Wallisch's affidavit states: 1. My name is William Wallisch. I am over twenty-one years of age, and I am competent to make this Affidavit. All matters stated herein are true and correct and within my personal knowledge. 2. I am currently the Vice President and Controller for Raytheon Aircraft Parts & Inventory Distribution. From April 1997 through August 2002, I served as the Vice President, Finance of Raytheon Travel Air Company. Rule 166a(f) requires an affiant to affirmatively show that he is competent to testify to the matters stated in an affidavit. TEX.R. CIV. P. 166a(f). The affidavit must affirmatively demonstrate how the affiant is competent to testify. Jackson T. Fulgham Co. v. Stewart Title Guar. Co., 649 S.W.2d 128, 130 (Tex.App.-Dallas 1983, writ ref'd n.r.e.). "The personal knowledge requirement is satisfied if the affidavit sufficiently describes the relationship between the affiant and the case so that it may be reasonably assumed that the affiant has personal knowledge of the facts 366 stated in the affidavit." Stucki v. Noble, 963 S.W.2d 776, 780 (Tex.App.-San Antonio 1998, pet. denied). Here, the assertion in Wallisch's affidavit that he was Vice President of Finance at RTA from 1997 until 2002 demonstrates a basis for personal knowledge concerning Miller's employment status. We have held that such an assertion is sufficient to demonstrate personal knowledge and competence to testify. See Waite v. BancTexas-Houston, N.A., 792 S.W.2d 538, 540-41 (Tex.App.-Houston [1st Dist.] 1990, no writ); see also Equisource Realty Corp. v. Crown Life Ins. Co., 854 S.W.2d 691, 695 (Tex.App.-Dallas 1993, no writ); Jackson T. Fulgham Co., 649 S.W.2d at 130. Accordingly, we hold that the factual assertions in Wallisch's affidavit demonstrate his competence to testify about Miller's employment status at RTA. 2. Hearsay Miller also contends that Wallisch's statement in the affidavit referring to the combination agreement creating FOC constitutes hearsay. Specifically, Miller objects to the portion of Wallisch's affidavit that states, "although, pursuant to the parties' agreements, the pilots would be under the operational control of Flight Options, L.L.C. between March 20, 2002 and April 1, 2002." RAC and RTA respond that the statement regarding the terms of the agreement constitutes a statement of operative facts, and is therefore not hearsay. To obtain reversal of a judgment based on error in the admission or exclusion of evidence, an appellant must show that the trial court's ruling was erroneous and that the error was calculated to cause, and probably did cause, "rendition of an improper judgment." TEX.R.APP. P. 44.1(a)(1); Malone, 972 S.W.2d at 43; Benavides v. Cushman, Inc., 189 S.W.3d 875, 879 (Tex. App.-Houston [1st Dist.] 2006, no pet.). In making this determination, we review the entire record. City of Brownsville v. Alvarado, 897 S.W.2d 750, 754 (Tex.1995). Reversible error does not usually occur in connection with evidentiary rulings unless the appellant can demonstrate that the whole case turns on the particular evidence admitted or excluded. Id. at 753-54; Benavides, 189 S.W.3d at 879; GT & MC, Inc. v. Tex. City Ref., Inc., 822 S.W.2d 252, 257 (Tex.App.-Houston [1st Dist.] 1991, writ denied). Here, Miller included a copy of the combination agreement in his summary judgment evidence. Given that the agreement was present in the record, we hold that Miller could not be harmed by error, if any, in the trial court's admission of the statement in Wallisch's affidavit. See TEX.R.APP. P. 44.1(a)(1); GTE Sw., Inc. v. Bruce, 998 S.W.2d 605, 619-20 (Tex.1999) (holding that trial court's error in admitting expert testimony as to whether defendant's conduct was extreme and outrageous was harmless because expert testimony was cumulative of abundant evidence at trial showing that his conduct was extreme and outrageous); Fairmont Supply Co. v. Hooks Indus., Inc., 177 S.W.3d 529, 532 (Tex.App.-Houston [1st Dist.] 2005, pet. denied) (holding that any error in admission of evidence was harmless because it was cumulative). B. Wrongful Discharge Miller contends the trial court erred in granting RAC and RTA's traditional motion for summary judgment on his wrongful discharge claims because RAC and RTA did not establish as a matter of law that Miller was terminated for reasons other than his refusal to fly aircraft in violation of FAA regulations. We review a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); Provident Life & Accident Ins. Co. v. Knott, 128 367 S.W.3d 211, 215 (Tex.2003). Under the traditional standard for summary judgment, the movant has the burden to show that no genuine issue of material fact exists and that the trial court should grant a judgment as a matter of law. TEX.R. CIV. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). In our review, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Dorsett, 164 S.W.3d at 661. In Texas, absent a specific agreement to the contrary, an employer may fire an employee at will for good cause, bad cause, or no cause at all. Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex.1998). In Sabine Pilot Service, Inc. v. Hauck, the Texas Supreme Court recognized an exception to the employment-at-will doctrine for an employee discharged "for the sole reason that the employee refused to perform an illegal act." 687 S.W.2d 733, 735 (Tex.1985); see also Winters v. Houston Chronicle Publ'g Co., 795 S.W.2d 723, 724 (Tex.1990). The court held that a plaintiff has the burden to prove by a preponderance of the evidence that his discharge was for the sole reason that he refused to perform an illegal act that he reasonably believed would subject him to criminal penalties. Sabine Pilot, 687 S.W.2d at 735; see also City of Midland v. O'Bryant, 18 S.W.3d 209, 215 (Tex.2000); Winters, 795 S.W.2d at 724. The Sabine Pilot exception applies when an employee has been unacceptably forced to choose between risking criminal liability or being discharged from his livelihood. See Winters, 795 S.W.2d at 724. An employer who discharges an employee both for refusing to perform an illegal act and for a legitimate reason cannot be liable for wrongful dischargethe refusal must be the sole cause for the employee's termination. Tex. Dep't of Human Servs. v. Hinds, 904 S.W.2d 629, 633 (Tex.1995); McClellan v. Ritz-Carlton Hotel Co., 961 S.W.2d 463, 464 (Tex.App.-Houston [1st Dist.] 1997, no pet.). The evidence is undisputed that RAC and RTA terminated each and every one of their 500 pilots when RTA ceased its operation of the fractional aircraft ownership business. The master transaction agreement creating FOC provides: 4.5 Employees. Prior to the Closing Date, the Parties will identify the employees of [FOI] and [RTA] that are to be offered employment with [FOC] as of the Closing Date and shall make a formal offer of employment to each such Person and shall inform each such Person of the compensation and benefits for which such Person will be eligible as an employee of [FOC]. In his affidavit, William Wallisch states, 4. On March 20, 2002, Travel Air combined certain of its assets and liabilities with certain assets and liabilities of its competitor Flight Options, Inc., in order to form a separate legal entity, Flight Options, L.L.C. 5. Although Travel Air did not cease to exist as a result of this transaction, it ceased its operation of fractionally-owned aircraft. As a result, the services rendered by the pilots who were employed by Travel Air were no longer necessary, and the employment of Travel Air pilots was officially terminated on or about April 1, 2002 (although, pursuant to the parties' agreements, the pilots would be under the operational control of Flight Options, L.L.C. between March 20, 2002 and April 1, 2002). Miller accepted an offer of employment from FOC in February of 2002. RAC executed a termination of employment form on April 2, 2002 that states that 368 Miller's employment was voluntarily terminated because he obtained another job due to the "[m]erger of Raytheon Travel Air and Flight Options." This evidence establishes as a matter of law that RAC and RTA terminated the employment of all their pilots, including Miller, because of the creation of FOC and the cessation of RTA's fractional aircraft ownership business. See Bell v. Specialty Packaging Prods., 925 F. Supp. 475, 477 (W.D.Tex.1994) (holding that because reduction in work force at her plant was at least one reason for plaintiff's termination, her Sabine Pilot claim failed); cf. McClellan, 961 S.W.2d at 464-65 (holding defendant failed to prove as matter of law at least one legitimate reason for terminating plaintiff's employment). An employer who discharges an employee for reasons other than the refusal to perform an illegal act cannot be liable for wrongful discharge under Sabine Pilot. See Hinds, 904 S.W.2d at 633; McClellan, 961 S.W.2d at 464. The trial court therefore properly granted RAC and RTA's summary judgment on Miller's Sabine Pilot claims. Preemption In his second issue, Miller contends the trial court erred in granting FOC's summary judgment on his Sabine Pilot wrongful discharge claim because the claim is not preempted by the Airline Deregulation Act of 1978(ADA).[3] A. General Preemption Law Federal preemption of state law is grounded in the Supremacy Clause of the United States Constitution, which provides that "the Laws of the United States . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. CONST. art. VI, cl. 2; Delta Air Lines, Inc. v. Black, 116 S.W.3d 745, 748 (Tex.2003). Under the Supremacy Clause, if a state law conflicts with federal law, the state law is preempted and will have no effect. Maryland v. Louisiana, 451 U.S. 725, 746, 101 S. Ct. 2114, 2128-29, 68 L. Ed. 2d 576 (1981); Black, 116 S.W.3d at 748. "Preemption can take one of several forms." Black, 116 S.W.3d at 748. A federal law may expressly preempt a state law. Id.; Great Dane Trailers, Inc. v. Estate of Wells, 52 S.W.3d 737, 743 (Tex. 2001). A federal law may also preempt a state law impliedly, "either (i) when the scheme of federal regulation is sufficiently comprehensive to support a reasonable inference that Congress left no room for supplementary state regulation or (ii) if the state law actually conflicts with federal regulations." Black, 116 S.W.3d at 748; Great Dane Trailers, 52 S.W.3d at 743. A state law presents an actual conflict when a party cannot comply with both state and federal regulations, or when the state law would obstruct Congress' purposes and objectives. Black, 116 S.W.3d at 748; Great Dane Trailers, 52 S.W.3d at 743. The purpose of Congress is the ultimate touchstone in every preemption case. Retail Clerks Int'l Ass'n v. Schermerhorn, 375 U.S. 96, 103, 84 S. Ct. 219, 222-23, 11 L. Ed. 2d 179 (1963); Black, 116 S.W.3d at 748. We discern congressional intent primarily from the statute's language and structure. Medtronic, Inc. v. Lohr, 518 U.S. 470, 486, 116 S. Ct. 2240, 369 2250-51, 135 L. Ed. 2d 700 (1996); Black, 116 S.W.3d at 748. Also relevant is the purpose of the statute as a whole, which is revealed through "the reviewing court's reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law." Lohr, 518 U.S. at 486, 116 S. Ct. at 2251; Black, 116 S.W.3d at 748-49. B. Airline Deregulation Act In 1978, Congress deregulated the airline industry by enacting the ADA. See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378, 112 S. Ct. 2031, 2034, 119 L. Ed. 2d 157 (1992); Black, 116 S.W.3d at 749. The ADA is designed to promote "maximum reliance on competitive market forces," while at the same time "assigning and maintaining safety as the highest priority in air commerce." 49 U.S.C. § 40101(a) (2000); Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 230, 115 S. Ct. 817, 824, 130 L. Ed. 2d 715 (1995). To ensure that the states would not compromise federal deregulation by promulgating regulations of their own, the ADA contains a preemption provision. 49 U.S.C. § 41713(b)(1) (2000); Morales, 504 U.S. at 378-79, 112 S. Ct. at 2034. The ADA's preemption provision provides: Except as provided in this subsection, a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart. 49 U.S.C. § 41713(b)(1). 1. Morales and Wolens In Morales v. Trans World Airlines, Inc., the United State Supreme Court examined whether the ADA preempted the enforcement of guidelines concerning regulation of airline fare advertising through Texas's consumer protection statutes. 504 U.S. at 378-80, 112 S.Ct. at 2034-35. Relying on its ERISA line of cases and the ordinary meaning of the words of the statute, the Court construed the phrase "related to" broadly to preempt state enforcement actions "having a connection with or reference to" airline rates, routes, or services. Id. at 384, 112 S. Ct. at 2037. The Court also held that the preemption provision could apply to laws of general applicability that do not specifically reference the airline industry. Id. at 386, 112 S. Ct. at 2038. While the Court acknowledged that some state actions might affect airline fares in too tenuous, remote, or peripheral a manner to be preempted, it concluded that the obligations imposed by the advertising guidelines would affect the airlines' ability to market their product and the fares they charged. Id. at 390, 112 S. Ct. at 2040. The advertising guidelines therefore had a "forbidden significant effect" on the airlines' rates, routes, and services because they restricted fare advertising, which relates to rates. Id. at 388-89, 112 S. Ct. at 2039. The Court held the ADA preempted the fare advertising guidelines in the state consumer protection statutes at issue. Id. at 391, 112 S. Ct. at 2041. In American Airlines, Inc. v. Wolens, the United States Supreme Court again addressed the ADA's preemption clause. 513 U.S. at 227-28, 115 S.Ct. at 823-24. Wolens involved state law consumer fraud and breach of contract claims arising from retroactive changes in an airline's frequent flyer program. Id. at 224-25, 115 S. Ct. at 822. The Court focused on the preemption clause phrase, "enact or enforce any law," to determine the ADA's preemptive scope. Id. at 226, 228-29, 115 S. Ct. at 823-24. The Court held that, like the guidelines at issue in Morales, the ADA 370 preempted Illinois's consumer fraud statute because the statute "serve[d] as a means to guide and police the marketing practices of the airlines." Id. at 228, 115 S. Ct. at 823-24. The Wolens Court next turned to whether the ADA preempted the plaintiffs' breach of contract claims. Id. at 228, 115 S. Ct. at 824. The Court held that the ADA's preemption clause did not shield airlines from "suits alleging no violation of state-imposed obligations, but seeking recovery solely for the airline's alleged breach of its own, self-imposed undertakings." Id. The Court reasoned that the contract at issue was a privately ordered obligation, and did not amount to a state's enactment or enforcement of a state law, rule, regulation, standard, or other provision. Id. at 228-29, 115 S. Ct. at 824; see also 49 U.S.C. § 41713(b)(1). The Court limited its holding, however, to suits based on the terms of the parties' bargain, "with no enlargement or enhancement based on state laws or policies external to the agreement." Id. at 233, 115 S. Ct. at 826. Courts have interpreted this to mean that if a court cannot adjudicate a contract claim without resort to external law, the ADA preempts the claim. See, e.g., Smith v. Comair, Inc., 134 F.3d 254, 257 (4th Cir.1998); Black, 116 S.W.3d at 750; Boon Ins. Agency, Inc. v. Am. Airlines, Inc., 17 S.W.3d 52, 58-59 (Tex.App.-Austin 2000, pet. denied). Additionally, the Wolens Court suggested that the ADA's preemption provision should be read in light of the ADA's overarching deregulatory purpose, and should be interpreted to mean that states may not seek to impose their own public policies or theories of competition or regulation on the operations of an air carrier. See 513 U.S. at 229 n. 5, 115 S. Ct. at 824 n. 5. 2. Kiefer and Black The Texas Supreme Court first addressed preemption under the ADA in Continental Airlines, Inc. v. Kiefer. 920 S.W.2d 274, 275 (Tex.1996). The court applied a two-part analysis to determine whether the ADA preempted the plaintiffs' personal injury negligence claims.[4]Id. at 281-82. First, the court examined whether the claims related to airline rates, routes, or services. Id. at 281. Second, the court examined whether the claims constituted the enactment or enforcement of a state law, rule, regulation, standard, or other provision. Id. The court concluded that, although the plaintiffs' negligence claims clearly related to the airline's services, the claims did not amount to the enforcement of a state law and therefore were not preempted. Id. at 282. The court noted that, unlike the state consumer protection legislation at issue in Morales, negligence actions do not "carry the same `potential for intrusive regulation of airline business practices. . . .'" Id. (quoting Wolens, 513 U.S. at 227, 115 S. Ct. at 823). The court, however, cautioned that, depending on the nature and extent of damages sought, even simple negligence actions may constitute an impermissible regulation of the airline industry through state tort law. Id. In making its decision, the court focused on the extent to which the negligence claims threatened to encroach on the congressional objective of airline deregulation, instead of categorically declaring that the ADA always exempts personal injury claims from preemption. Id.; see also Black, 116 S.W.3d at 751. 371 In 2003, The Texas Supreme Court again addressed preemption under the ADA in Delta Air Lines, Inc. v. Black. 116 S.W.3d at 747. In Black, the plaintiff and his spouse purchased first-class seats on a Delta flight for a trip to Las Vegas. Id. When the couple arrived at the airport, Delta denied the spouse a first-class seat because the flight was overbooked. Id. The plaintiff then sued Delta for breach of contract, fraud, and negligent misrepresentation. Id. at 748. Delta asserted that the ADA preempted the plaintiff's claims. Id. The Texas Supreme Court applied the two-part analysis from Kiefer and examined whether the plaintiff's contract claims related to airline prices, routes, or services, and whether the claims constituted the enactment or enforcement of a state law, regulation, or other provision. Id. at 752-54. The court also examined cases from the Ninth and Fifth Circuits to determine the meaning of the term "services" in the ADA's preemption clause. Id. at 752; see also Charas v. Trans World Airlines, Inc., 160 F.3d 1259, 1261 (9th Cir.1998) (narrowly defining services as "the prices, schedules, origins and destinations of the point-to-point transportation of passengers, cargo, or mail"); Hodges v. Delta Airlines, Inc., 44 F.3d 334, 336 (5th Cir. 1995) (broadly defining services to include "ticketing, boarding procedures, provision of food and drink, and baggage handling, in addition to the transportation itself"). While the court did not articulate its own definition of services, it concluded that claims involving boarding and seating procedures fall within most courts' definitions of services, including the Ninth and Fifth Circuits'. Black, 116 S.W.3d at 753. The court therefore held that the plaintiff's contract claims related to Delta's services. Id.; see also Wolens, 513 U.S. at 226, 115 S. Ct. at 823 (noting that services includes "access to flights and class-of-service upgrades"). The court stated that, unlike the frequent flyer program in Wolens, "seating policies and boarding procedures are not peripheral to the operation of an airline, but are inextricably linked to the contract of carriage between a passenger and the airline and have a definite `connection with, or reference to' airline services." Black, 116 S.W.3d at 753 (quoting Morales, 504 U.S. at 384, 112 S. Ct. at 2037). The court also concluded that the plaintiff's contract claims, if allowed to proceed, would constitute state enforcement or enactment of a state law under the preemption provision of the ADA. See id. at 756. The court discussed the fact that the alleged contractual violations in the case involved a common condition unique to the airline industrythe failure to seat an allegedly confirmed ticket holder because of overbookingand that unlike the frequent flyer agreements at issue in Wolens, specific federal regulations govern compensation for air passengers who are involuntarily prevented from boarding a flight due to overbooking. Id.; see also 14 C.F.R. §§ 250.1-250.9 (2000) (requiring airlines to pay compensation to any passenger who is involuntarily denied boarding caused by oversold flight, and allowing passenger to decline payment and recover damages in court of law, unless passenger is offered accommodations or is seated in section of aircraft other than that specified on ticket at no extra charge). Delta had incorporated these federal regulations into its contract. Under the federal regulations, the plaintiff would not have been entitled to sue Delta for breach of contract because the plaintiff and his spouse were not involuntarily denied boardingDelta offered to seat them "in a section of the aircraft other than that specified on the ticket at no extra charge. . . ." Black, 116 S.W.3d at 755-56; see also 14 C.F.R. § 250.6(c). The court noted that the specific federal 372 regulations had a national purpose in that they provided a uniform system of compensation to passengers. Black, 116 S.W.3d at 756. The court stated that, "[i]f passengers were permitted to challenge airlines' boarding procedures under state common law, the airline industry would potentially be subject to regulation by fifty different states." Id. The court held that the ADA preempted the plaintiff's contract claims because the court could only adjudicate the claims by reference to laws and policies external to the contract. Id. C. Air Carrier Status Miller contends the ADA does not apply to this case because FOC did not establish as a matter of law that it is an "air carrier," as defined by the ADA. 49 U.S.C. § 40102(a)(2) (2000). The ADA's preemption provision applies only to laws or regulations that affect air carriers. Id. § 41713(b)(1). Under the ADA, "air carrier" is defined as "a citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation." Id. § 40102(a)(2). "[A]ir transportation" means "foreign air transportation, interstate air transportation, or the transportation of mail by aircraft." Id. § 40102(a)(5). "[I]nterstate air transportation" means "the transportation of passengers or property by aircraft as a common carrier for compensation. . . ." Id. § 40102(a)(25). A "citizen of the United States" can be "a corporation or association organized under the laws of the United States or a State, the District of Columbia, or a territory or possession of the United States. . . ." Id. § 40102(a)(15)(C) (Supp. III 2003). FOC produced a certificate from the FAA certifying its status as an air carrier. See 14 C.F.R. § 119.5(a) (2000) ("A person authorized by the Administrator to conduct operations as a direct air carrier will be issued an Air Carrier Certificate."). Miller did not produce any contrary evidence to raise a fact issue. FOC has therefore established as a matter of law its status as an air carrier under the ADA.[5] D. ADA Preemption of Miller's Sabine Pilot Claim In determining whether the ADA preempts Miller's Sabine Pilot claim against FOC, we apply the Texas Supreme Court's two-part analysis from Kiefer. Kiefer, 920 S.W.2d at 281-82. We begin with the question of whether Miller's Sabine Pilot wrongful discharge claim is related to FOC's prices, routes, or services. See id. at 281. Miller's Sabine Pilot claim authorizes a suit for wrongful discharge when FOC terminated his employment allegedly for refusing to fly aircraft that did not meet FAA regulations. See 687 S.W.2d at 735. It is undisputed that Miller's refusals to pilot aircraft resulted in the grounding of the aircraft. Grounding aircraft directly affected FOC's point-to-point transportation services. While some variation has arisen among the courts regarding the definition of the term "services" under the ADA, every court attempting to define the term has included point-to-point transportation within its definition 373 as a bargained-for aspect of air travel. See Branche v. Airtran Airways, Inc., 342 F.3d 1248, 1257 (11th Cir.2003) (adopting Fifth Circuit definition of services, which includes transportation itself); Botz v. Omni Air Int'l, 286 F.3d 488, 495 (8th Cir.2002) (holding flight attendant's refusal to violate federal law by exceeding work hour maximum affected air carrier's services because aircraft could not fly without her); Duncan v. NW. Airlines, Inc., 208 F.3d 1112, 1114-15 (9th Cir.2000) (holding that service refers to provision of air transportation to and from various markets at various times), cert. denied, 531 U.S. 1058, 1058, 121 S. Ct. 650, 650-51, 148 L. Ed. 2d 571 (2000) (O'Connor, J., dissenting) (noting various definitions of term "services" under ADA and need to resolve this conflict between circuit courts); Charas, 160 F.3d at 1261 (defining services to include point-to-point transportation of passengers, cargo, or mail); Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1433 (7th Cir.1996) (defining services to include transportation itself); Hodges, 44 F.3d at 336 (defining services to include transportation itself); Black, 116 S.W.3d at 752 (citing service definitions from Hodges and Charas). Given the United States Supreme Court's broad interpretation of the phrase "related to," we hold that Miller's Sabine Pilot claim relates to FOC's point-to-point transportation services. See 49 U.S.C. § 41713(b)(1); Morales, 504 U.S. at 384, 112 S. Ct. at 2037 (defining phrase "related to" broadly to preempt state enforcement actions having connection with or reference to airline rates, routes, or services). The second inquiry under the Kiefer analysis is whether Miller's Sabine Pilot wrongful discharge claim constitutes the enforcement of a state law, regulation, or other provision within the meaning of the ADA's preemption clause. See Kiefer, 920 S.W.2d at 281. Unlike a simple negligence claim, or a contract claim involving only obligations voluntarily undertaken by an air carrier, a Sabine Pilot wrongful discharge claim embodies state public policy. See Wolens, 513 U.S. at 232-33, 115 S. Ct. at 826; Kiefer, 920 S.W.2d at 282. A Sabine Pilot claim represents a policy determination by the State of Texas that an employee terminated for refusing to perform a criminal act should have a tort action against his employer. See 687 S.W.2d at 735 ("We now hold that public policy, as expressed in the laws of this state and the United States which carry criminal penalties, requires a very narrow exception to the employment-at-will doctrine announced in East Line & R.R.R. Co. v. Scott."). Under the facts of this case, Sabine Pilot would allow Miller to seek money damages in state court when he chose to ground aircraft and suffered termination of his employment as a consequence. State enforcement of Miller's Sabine Pilot claim therefore imposes state policies on the point-to-point transportation services of FOC. See Black, 116 S.W.3d at 757. "A state's common law cannot operate against an airline in this context when it would constitute state enforcement of a law relating to airline services." Id.; see also Morales, 504 U.S. at 383-84, 112 S. Ct. at 2037. Contrary to the ADA's purpose, Miller's Sabine Pilot claim has the potential to impose state regulation on FOC's business practices and transportation services. See Wolens, 513 U.S. at 227-28, 115 S. Ct. at 823; Black, 116 S.W.3d at 754; Kiefer, 920 S.W.2d at 282. This is true despite the fact that the ADA and the Sabine Pilot claim alleged here have consistent goals: compliance with federal regulations and airline safety. The ADA's preemption provision displaces all state laws that fall within its sphere, regardless of whether the state law is consistent or inconsistent with the ADA's purposes 374 and objectives. Morales, 504 U.S. at 386-87, 112 S. Ct. at 2038. Accordingly, we hold that the ADA preempts Miller's Sabine Pilot claim because the claim relates to the transportation services FOC provides, and if allowed, would amount to the enactment or enforcement of a state law.[6] The Eighth Circuit's decision in Botz v. Omni Air International supports our decision in this case. 286 F.3d at 495. In Botz, Omni Air International terminated Anna Botz's employment as a flight attendant after she refused a flight assignment that she believed violated federal safety regulations. Id. at 489. Botz sued Omni under a Minnesota whistleblower statute. Id. Omni asserted that the ADA preempted Botz's claim because the claim was related to Omni's point-to-point transportation services. Id. at 490, 492. The court agreed, reasoning that Botz's whistleblower claim allowed her to refuse assignments without fear of retaliation. Id. at 494. Refusal of an assignment could potentially disrupt Omni's transportation services because federal law requires a certain number of flight attendants on each flight. See id. The Eleventh Circuit's decision in Branche v. Airtran Airways, Inc. uses a similar analysis but applies it to different facts. 342 F.3d at 1252. In Branche, Airtran Airways terminated Michael Branche's employment as a safety inspector after he reported Airtran's violations of federal law to the FAA. Id. Branche sued Airtran under a Florida whistleblower statute. Id. Airtran asserted that the ADA preempted Branche's claim because the claim was related to Airtran's services. Id. The court adopted the Fifth Circuit's definition of services from Hodges v. Delta Airlines, Inc., and held that only air carrier services having a connection with or reference to the elements of air travel that are bargained for by passengers are preempted by the ADA. Id. at 1257-58; Hodges, 44 F.3d at 336 ("Elements of the air carrier service bargain include items such as ticketing, boarding procedures, provision of food and drink, and baggage handling, in addition to the transportation itself."). Branche's claim did not relate to Airtran's services. Branche, 342 F.3d at 1257. The court stated, "[a]lthough some safety-related claims may be tied to air carrier services, the very fact that they concern safety, standing alone, is insufficient to demonstrate this nexus." Id. at 1260. In discussing Botz, the court stated: 375 As for the connection between retaliatory discharge claims and airline services, we do not dispute the Eight Circuit's conclusion that the grounding of an airplane is related to airline services, in particular, the transport of passengers from one place to another. However, in this case, the connectionor, indeed, the potential connectionbetween Branche's actions and air carrier services is far more attenuated than in Botz. As the Eighth Circuit said, if a flight attendant refuses to fly and a replacement cannot be found, FAA regulations prevent the plane from leaving the gate, thereby disrupting service. Here, by contrast, we are not concerned with the withdrawal of clearance for a plane to take off based on mechanical concerns, but instead only with Branche's post hoc reporting of a FAA violation. . . . Had Branche claimed that Airtran fired him in retaliation for refusing to allow a plane to take off due to safety concerns, this would present a situation closer to the one at issue in Botz. But that is not the claim before us. Id. at 1262-63. Factually, our case is closer to Botz than it is to Branche. Id.; Botz, 286 F.3d at 494-95. Miller's Sabine Pilot claim is preempted because he alleges that he refused to pilot aircraft and was fired for it, and the Sabine Pilot claim subjects his employer to state law liability for firing a pilot for his refusal to fly. Unlike a post hoc report of a violation as in Branche, or a refusal to perform an illegal act unrelated to actual air flight, Miller's claim directly impinges on the provision of air carrier services. See Sabine Pilot, 687 S.W.2d at 735. We therefore hold that the trial court properly granted FOC's summary judgment on Miller's Sabine Pilot wrongful discharge claim. We note the limited applicability of our holding. The ADA would not preempt a Sabine Pilot claim against an air carrier that is not related to the air carrier's prices, routes, or services. See 49 U.S.C. § 41713(b)(1). Contract Claims In his fourth issue, Miller contends the trial court erred in granting summary judgment on his breach of contract claims. RAC and RTA attacked the breach of contract claims with a no-evidence motion for summary judgment, while FOC filed a traditional motion for summary judgment. A. RAC and RTA's Summary Judgment In their no-evidence motion for summary judgment, RAC and RTA contended that Miller produced no evidence that an employment contract existed. A contract that alters the at-will employment relationship must "unequivocally indicate [the employer's] definite intent to be bound not to terminate the employee except under clearly specified circumstances." Brown, 965 S.W.2d at 502; see also Midland Judicial Dist. Cmty. Supervision & Corr. Dep't v. Jones, 92 S.W.3d 486, 487 (Tex.2002). In a Rule 166a(i) no-evidence summary judgment, the movant represents that no evidence exists as to one or more essential elements of the non-movant's claims, upon which the non-movant would have the burden of proof at trial. TEX.R. CIV. P. 166a(i). The non-movant then must present evidence raising a genuine issue of material fact on the challenged elements. Id. A no-evidence summary judgment is essentially a pre-trial directed verdict. Bendigo v. City of Houston, 178 S.W.3d 112, 113-14 (Tex.App.-Houston [1st Dist.] 2005, no pet.); Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68, 70-71 (Tex.App.-Austin 1998, no pet.). On review, we ascertain whether the non-movant produced more 376 than a scintilla of probative evidence to raise a genuine issue of material fact. Jackson, 979 S.W.2d at 70-71. More than a scintilla of evidence exists if the evidence "`rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.'" King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003) (quoting Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997)). If the evidence does no more than create a mere surmise or suspicion of fact, less than a scintilla of evidence exists. Chapman, 118 S.W.3d at 751. To defeat a no-evidence motion for summary judgment, the respondent is not required to marshal its proof; its response need only point out evidence that raises a fact issue on the challenged elements. TEX.R. CIV. P. 166a(i) cmt. Miller received a letter from RAC in November of 1997 offering him employment as a pilot. Miller accepted the offer by signing the last page of the letter, as requested by RAC. Miller asserts that as a government contractor, RAC promised that it would employ Vietnam veterans and advance them in employment. See 38 U.S.C. § 4212(a)(1) (Supp. III 2003). Miller indicated on his RAC employment application that he wanted to participate in the Vietnam veterans' affirmative action program. The RAC employment application states: Raytheon Aircraft Company is a government contractor subject to Section 503 of the Rehabilitation Act of 1973 and Section 402 of the Vietnam Era Veterans Readjustment Assistance Act of 1974. These acts require this company to take action to employ and advance in employment, in accordance with its policies, qualified handicapped/disabled individuals, disabled veterans and veterans of the Vietnam era. If you have such a handicap/disability, or you are a disabled veteran and would like to be considered under the Affirmative Action Program, please complete the information requested below. Miller also executed an employee assignment agreement and an employee confidentiality agreement at the request of RAC. In the assignment agreement, Miller gives RAC permission to search his person or vehicle and he agrees that any inventions he creates or patents he obtains while working at RAC will become the exclusive property of RAC. The agreement does not recite any consideration. In the confidentiality agreement, Miller promises not to disclose confidential information to anyone outside of RAC in consideration of payment of his salary. Miller also executed a compensation agreement that set forth his salary in terms of the amount he was to receive every two weeks. In addition, RTA's policy manual contains a ten-year pay scale. This evidence does not unequivocally indicate RAC's or RTA's intent to be bound not to terminate Miller except under clearly specified circumstances. See Brown, 965 S.W.2d at 502. While the federal affirmative action program requires RAC and RTA to hire and advance Vietnam veterans, the program in no way limits an employer's ability to discharge employees at will, regardless of any Vietnam veteran status. See 38 U.S.C. § 4212(a)(1). RTA's policy manual specifically states that it is an at-will employer, and RTA "reserves the right to terminate employment for any reason at any time." The policy manual also expressly states that it does not constitute a contract. See Fed. Express Corp. v. Dutschmann, 846 S.W.2d 282, 283 (Tex.1993) ("A disclaimer in an employee handbook, such as the one included by Federal Express, negates any implication that a personnel procedures 377 manual places a restriction on the employment at will relationship."). The other evidence cited by Miller, including the offer letter and employment agreements, also does not indicate any intent on the part of RAC or RTA to be bound not to terminate Miller except under clearly specified circumstances. See Jones, 92 S.W.3d at 487-88 (holding offer letter that contained statements of annual salary and general statement that salary is based on future performance did not create employment contract); Brown, 965 S.W.2d at 502 ("An employee who has no formal agreement with his employer cannot construct one out of indefinite comments, encouragements, or assurances."); Rios v. Tex. Commerce Bancshares, Inc., 930 S.W.2d 809, 815 (Tex.App.-Corpus Christi 1996, writ denied) (holding letter offering employment was not contract because it merely stated salary and other benefits but did not set term of employment); Massey v. Houston Baptist Univ., 902 S.W.2d 81, 83-84 (Tex.App.-Houston [1st Dist.] 1995, writ denied) (holding written employment contract did not alter at-will employment relationship because contract contained no term limiting employer's ability to terminate employee at will); Lee-Wright, Inc. v. Hall, 840 S.W.2d 572, 578 (Tex.App.-Houston [1st Dist.] 1992, no writ) (holding at-will status of employment relationship altered by agreement to employ plaintiff for specific number of years). Miller failed to produce more than a scintilla of evidence that he had an employment contract with RAC or RTA. See Jackson, 979 S.W.2d at 70-71. The trial court therefore properly granted RAC and RTA's summary judgment on Miller's breach of contract claims. B. FOC's Summary Judgment In its traditional motion for summary judgment, FOC contends that it established as a matter of law that no employment contract existed between itself and Miller that would limit its ability to terminate Miller's employment at will. Miller contends that in addition to the evidence cited above, the following evidence establishes an employment contract between himself and FOC. The combination agreement between FOI and RTA provides: At the Effective Time, except as specifically provided below in this Section 6.2, [FOC] hereby agrees to assume, and agrees to pay, perform and discharge when due, all obligations and liabilities for compensation and employee benefits, and all other liabilities which are attributable to [FOI's] or [RTA's] employment of any employee, agent or independent contractor prior to the Effective Time without regard to whether such obligations or liabilities arose prior to or subsequent to the Effective Time. In December 2001, RTA's president, Gary Hart, wrote to RTA's pilots to announce that all pilots would be offered the opportunity to continue flying for FOC. A few weeks later, Miller received a letter from Kenneth Ricci, Chairman and CEO of FOI. The letter stated, "all pilot positions will be retained and all pilots will be assured of their current flying positions and seniority" at FOC. The letter also contained a comparison between Miller's salary at RTA and his new salary at FOC. Miller received a letter offering him employment at FOC in February of 2002. He accepted the offer by signing at the bottom of the letter, as requested by FOC. While FOC expressly agreed to assume the contractual obligations of RTA in the combination agreement, this did not create an employment contract between Miller and FOC. As we determined above, Miller did not have an employment contract with RAC and RTA; thus, there was no contract 378 for FOC to assume. See Brown, 965 S.W.2d at 502. The letters Miller received from FOC executives also do not indicate FOC's intent to be bound not to terminate Miller except under clearly specified circumstances. See id. None of Miller's employment documents guarantees him a minimum term of employment, or otherwise limits FOC's ability to terminate his employment at will. See Jones, 92 S.W.3d at 487-88 (holding offer letter that contained statements of annual salary and general statement that salary is based on future performance did not create employment contract); Brown, 965 S.W.2d at 502 ("An employee who has no formal agreement with his employer cannot construct one out of indefinite comments, encouragements, or assurances."); Travel Masters, Inc. v. Star Tours, Inc., 827 S.W.2d 830, 832-33 n. 2 (Tex.1991) (noting mere fact that employee was paid on monthly basis, without any other evidence, failed to establish that she was not at-will employee); Rios, 930 S.W.2d at 815 (holding letter offering employment was not contract because it merely stated salary and other benefits but did not set term of employment); Massey, 902 S.W.2d at 83-84 (holding written employment contract did not alter at-will employment relationship because contract contained no term limiting employer's ability to terminate employee at will); Hall, 840 S.W.2d at 578 (holding at-will status of employment relationship altered by agreement to employ plaintiff for specific number of years); Ryan v. Superior Oil Co., 813 S.W.2d 594, 595-96 (Tex.App.-Houston [14th Dist.] 1991, writ denied) (holding letters written to employees before merger concerning plan for retaining employees after transition do not form employment contract). Like the RTA policy manual, the FOC policy and procedures manual provides that all employees at FOC are employed on an "at will" basis, and expressly states that it does not constitute a contract. See Matagorda County Hosp. Dist. v. Burwell, 189 S.W.3d 738, 739-40 (Tex.2006) (holding employer's manual stating that employee "may" be dismissed for cause did not modify at-will employment by requiring that dismissal be only for cause); Dutschmann, 846 S.W.2d at 283 ("A disclaimer in an employee handbook, such as the one included by Federal Express, negates any implication that a personnel procedures manual places a restriction on the employment at will relationship."). Sullivan's affidavit also states that Miller's employment at FOC was at will, and that FOC never offered Miller an employment contract. FOC introduced evidence affirmatively establishing that it employed Miller at will. Accordingly, we hold that FOC has established as a matter of law that Miller's employment at FOC was at will. See Brown, 965 S.W.2d at 502 (holding employment is presumed to be at will absent specific contrary agreement). The trial court's summary judgment in favor of FOC on Miller's breach of contract claim was thus proper. Common Law Claims In his fifth issue, Miller contends the trial court erred in granting summary judgment on his common law claims. A. Promissory Estoppel Miller contends the trial court erred in granting summary judgment on his promissory estoppel claims. RAC, RTA, and FOC respond that Miller cannot maintain promissory estoppel claims in this case because there was no detrimental reliance as a matter of law. The elements of a promissory estoppel claim are: (1) a promise, (2) foreseeability of reliance thereon by the promisor, 379 and (3) substantial reliance by the promisee to his detriment. English v. Fischer, 660 S.W.2d 521, 524 (Tex.1983). Miller relies upon Roberts v. Geosource Drilling Services, Inc., in which the employer, Geosource, promised Roberts employment, inducing him to quit his former job. 757 S.W.2d 48, 49 (Tex.App.-Houston [1st Dist.] 1988, no writ). This court held that Roberts could maintain a promissory estoppel claim even through Roberts and Geosource had expressly contracted that the employment would be at will.[7]Id. at 50. We stated, "[i]t is no answer that the parties' written contract was for an employment-at-will, where the employer foreseeably and intentionally induces the prospective employee to materially change his position to his expense and detriment, and then repudiates its obligations before the written contract begins to operate." Id. Miller's promissory estoppel claims fail as a matter of law because Miller did not rely on any promise to his detriment. The evidence in this case that FOC hired Miller in early 2002 is undisputed, albeit for a short time. Moreover, Miller was not induced to leave his former jobrather, that position was eliminated incident to the creation of FOC. FOC did not promise to retain Miller for any length of time. Thus, even under Roberts, there could be no detrimental reliance in this case as a matter of law.[8]See English, 660 S.W.2d at 524; Roberts, 757 S.W.2d at 50-51. We therefore hold that the trial court properly granted summary judgment on Miller's promissory estoppel claims. B. Negligent Misrepresentation Miller contends the trial court erred in granting summary judgment on his negligent misrepresentation claims. RAC, RTA, and FOC respond that the statements Miller complains of constitute promises of future conduct rather than statements of existing fact and are therefore not actionable. The elements of a negligent misrepresentation claim are: (1) the representation is made by a defendant in the course of his business, or in a transaction in which he has a pecuniary interest; (2) the defendant supplies "false information" for the guidance of others in their business; (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the representation. Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 686 n. 24 (Tex.2002); McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 791 (Tex.1999); Fed. Land Bank Ass'n v. Sloane, 825 S.W.2d 439, 442 (Tex.1991). To establish a negligent misrepresentation claim, the plaintiff must also prove that the defendant misrepresented an existing fact rather than a promise of future conduct. See Sloane, 825 S.W.2d at 442; Dallas Firefighters Ass'n v. Booth Research Group, Inc., 156 S.W.3d 188, 194 (Tex. 380 App.-Dallas 2005, pet. denied); Swank v. Sverdlin, 121 S.W.3d 785, 802 (Tex.App.-Houston [1st Dist.] 2003, pet. denied); Allied Vista, Inc. v. Holt, 987 S.W.2d 138, 141 (Tex.App.-Houston [14th Dist.] 1999, pet. denied). Miller bases his negligent misrepresentation claims on two specific statements. In December 2001, RTA's president, Gary Hart, wrote to RTA's pilots to announce that all pilots would be offered the opportunity to continue flying for FOC. A few weeks later, Kenneth Ricci, Chairman and CEO of FOI, sent a letter to Miller, stating that "all pilot positions will be retained and all pilots will be assured of their current flying positions and seniority" at FOC. Miller asserts that these statements were false because the master transaction agreement creating FOC provides: 4.5 Employees. Prior to the Closing Date, the Parties will identify the employees of [FOI] and [RTA] that are to be offered employment with [FOC] as of the Closing Date and shall make a formal offer of employment to each such Person and shall inform each such Person of the compensation and benefits for which such Person will be eligible as an employee of [FOC]. Miller's negligent misrepresentation claims fail as a matter of law because the statements made by Hart and Ricci were promises of future conduct rather than statements of existing fact. See Dallas Fire Fighters Ass'n, 156 S.W.3d at 195 (holding statements about movement of ranks consisted of expectation of future conduct, not existing fact, and were not actionable); Swank, 121 S.W.3d at 802-03 (holding oral promises not to fire plaintiff, not to take control of AMPS, and not to exercise stock options were promises of future conduct, not existing fact); Holt, 987 S.W.2d at 141 (holding representations defendant would provide all equipment necessary to start Louisiana plant and would pay plaintiff $55,000 annually were promises of future conduct and not misrepresentations of existing fact); Miksch v. Exxon Corp., 979 S.W.2d 700, 706 (Tex. App.-Houston [14th Dist.] 1998, pet. denied) (holding alleged oral promise not to terminate plaintiff was not misrepresentation of existing fact but was promise to refrain from taking action in future). The trial court therefore properly granted summary judgment on Miller's negligent misrepresentation claims.[9] C. Fraud Miller contends the trial court erred in granting summary judgment on his fraud claims. RAC, RTA, and FOC respond that Miller's fraud claims are barred because his employment was at will. The elements of fraud are: (1) a material representation that was false when made; (2) when the representation was made, the speaker knew it was false or made it recklessly as a positive assertion without any knowledge of its truth; (3) the speaker made the representation with the intent that the other party should act upon it; (4) the party actually and 381 justifiably relied on the representation; and (5) thereby suffered injury. Ernst Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex.2001). "For a promise of future performance to be the basis of actionable fraud, it must have been false at the time it was made." Schindler v. Austwell Farmers Coop., 841 S.W.2d 853, 854 (Tex.1992). Miller bases his fraud claims on the statements by Hart and Ricci promising that all RTA pilots would be offered positions at FOC. Miller believes these statements were false when they were made because the master transaction agreement seems to indicate that not all RTA pilots would be offered positions at FOC. We have already determined that Miller's employment with RAC, RTA, and FOC was at will. See Brown, 965 S.W.2d at 502 (holding employment is presumed to be at will absent specific contrary agreement). This court has held that "[a]n `at will' employee is barred from bringing a cause of action for fraud against his employer based upon the employer's decision to discharge the employee." Leach v. Conoco, Inc., 892 S.W.2d 954, 961 (Tex.App.-Houston [1st Dist.] 1995, writ dism'd w.o.j.); see also Brown v. Swett & Crawford of Tex., Inc., 178 S.W.3d 373, 379-80 (Tex.App.-Houston [1st Dist.] 2005, no pet.) (holding status as at-will employee precludes claim for fraudulent inducement as matter of law). Miller's fraud claims based on the statements that FOC would hire all RTA pilots are therefore precluded as a matter of law because Miller's employment was at will. The trial court properly granted summary judgment on Miller's fraud claims. D. Civil Conspiracy Miller contends the trial court erred in granting summary judgment on his civil conspiracy claims. FOC filed a traditional summary judgment motion on Miller's civil conspiracy claim, alleging that Miller's claim fails as a matter of law because it is not supported by an underlying tort. RAC and RTA filed a no-evidence summary judgment motion, alleging Miller had produced no evidence of a meeting of the minds. A civil conspiracy is a combination by two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 614 (Tex.1996). The essential elements of a civil conspiracy are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex.2005); Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). Independent liability for civil conspiracy does not exist. Four Bros. Boat Works, Inc. v. Tesoro Petroleum Cos., 217 S.W.3d 653, 668 (Tex.App.-Houston [14th Dist.] 2006, no pet. h.). Civil conspiracy is considered a derivative tort because a defendant's liability depends upon its participation in some underlying tort for which the plaintiff seeks to hold the defendant liable. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex.1996). An actionable conspiracy must consist of acts that would have been actionable against the conspirators individually. Int'l Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 581 (Tex. 1963). Thus, to prevail on a civil conspiracy claim, the plaintiff must show the defendant was liable for some underlying tort. See Trammell Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631, 635 (Tex.1997); Tilton, 925 S.W.2d at 681. Miller asserts that RAC, RTA, FOI, and FOC engaged in a civil conspiracy to wrongfully discharge pilots who refused to fly aircraft in violation of federal law. As 382 evidence of this conspiracy, Miller produced the affidavits of Rusty Wharton and Reinhardt Hanold, who testified that John Topliff informed them that he had been instructed by his superiors at RTA to identify for termination any pilots who would not operate aircraft that had been issued flight releases. Wharton and Hanold were both RTA pilots, and Topliff was RTA's fleet manager. Topliff also testified that executives at FOC pressured pilots to fly aircraft in violation of federal law as well. Additionally, Miller cites the master transaction agreement and the combination agreement, which suggest that some RTA pilots might not be offered employment at FOC. As we determined above, the ADA preempts Miller's Sabine Pilot wrongful discharge claim against FOC. Miller's civil conspiracy claim against FOC therefore fails as a matter of law because Miller cannot assert a wrongful discharge claim against FOC under Sabine Pilot. A civil conspiracy claim against FOC will not lie unless evidence demonstrates that FOC participated in some underlying actionable conduct. Tilton, 925 S.W.2d at 681; Ortiz v. Collins, 203 S.W.3d 414, 422-23 (Tex. App.-Houston [14th Dist.] 2006, no pet.) (holding that where summary judgment was proper on underlying fraud claim due to lack of justifiable reliance, summary judgment was also proper on conspiracy to defraud claim); RTLC AG Prods., Inc. v. Treatment Equip. Co., 195 S.W.3d 824, 833 (Tex.App.-Dallas 2006, no pet.) (holding plaintiff could not maintain civil conspiracy claim because it could not establish underlying tort). Additionally, Miller produced no evidence that RAC and RTA had a meeting of the minds to perform an unlawful act necessary to establish his civil conspiracy claims. See Alford v. Thornburg, 113 S.W.3d 575, 588 (Tex.App.-Texarkana 2003, no pet.) (holding plaintiff produced no more than scintilla of evidence of meeting of minds); Boales v. Brighton Builders, Inc., 29 S.W.3d 159, 164 (Tex.App.-Houston [14th Dist.] 2000, pet. denied) (holding plaintiff produced no more than scintilla of evidence of meeting of minds); J. Parra e Hijos, S.A. de C.V. v. Barroso, 960 S.W.2d 161, 170 (Tex.App.-Corpus Christi 1997, no pet.) (holding plaintiff produced no evidence of meeting of minds). The trial court therefore properly granted summary judgment on Miller's civil conspiracy claims. E. Negligence Miller contends the trial court erred in granting summary judgment on his negligence claims. RAC, RTA, and FOC respond that an employer owes an at-will employee no duty of care in terminating his employment. A negligence cause of action has three elements: (1) a legal duty owed by one person to another, (2) a breach of that duty, and (3) damages proximately caused by the breach. D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex.2002). The threshold inquiry in a negligence case is duty. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.1995). The Texas Supreme Court has held that an employer owes no duty of care in discharging an at-will employee. See Tex. Farm Bureau Mut. Ins. Cos. v. Sears, 84 S.W.3d 604, 609 (Tex.2002). The court stated: By definition, the employment-at-will doctrine does not require an employer to be reasonable, or even careful, in making its termination decisions. If the at-will doctrine allows an employer to discharge an employee for bad reasons without liability, surely an employer should not incur liability when its reasons for discharge are carelessly formed. 383 Engrafting a negligence exception on our at-will employment jurisprudence would inevitably swallow the rule. Id. Miller contends that RAC, RTA, and FOC were negligent in terminating his employment. As we determined above, Miller's employment with RAC, RTA, and FOC was at will. See Brown, 965 S.W.2d at 502 (holding employment is presumed to be at will absent specific contrary agreement). RAC, RTA, and FOC therefore did not owe Miller a duty of care in terminating his employment. Miller's negligence claims fail as a matter of law. See Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 740 (Tex.2003); Sears, 84 S.W.3d at 609. The trial court properly granted summary judgment on Miller's negligence claims. F. Intentional Infliction of Emotional Distress Miller contends the trial court erred in granting summary judgment on his intentional infliction of emotional distress claims. Miller maintains that he suffered severe emotional distress because he was required to pilot aircraft that were not safe to fly, and because he did not know whether RTA's aircraft contained latent mechanical defects due to other pilots having concealed such defects at the request of RAC and RTA. The elements of intentional infliction of emotional distress are: (1) the defendant acted intentionally or recklessly; (2) the conduct was extreme and outrageous; (3) the defendant's actions caused the plaintiff emotional distress; and (4) the emotional distress that the plaintiff suffered was severe. City of Midland v. O'Bryant, 18 S.W.3d 209, 216 (Tex.2000). To be considered extreme and outrageous, conduct must be 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. Id. at 217. "[A] claim for intentional infliction of emotional distress does not lie for ordinary employment disputes." GTE SW., Inc. v. Bruce, 998 S.W.2d 605, 612-13 (Tex.1999). The mere fact of termination of employment, even if the termination is wrongful, is not legally sufficient evidence that the employer's conduct was extreme and outrageous. SW. Bell Mobile Sys., Inc. v. Franco, 971 S.W.2d 52, 54 (Tex.1998). The evidence Miller produced demonstrates that he suffered emotional distress because FOC terminated his employment and he was required to search for a new job. Even if FOC wrongfully terminated Miller, this fact alone would not support a claim for intentional infliction of emotional distress. See id. ("However, the mere fact of termination of employment, even if the termination is wrongful, is not legally sufficient evidence that the employer's conduct was extreme and outrageous under the rigorous standard that we established in Twyman."). The trial court therefore properly granted summary judgment on Miller's intentional infliction of emotion distress claims. G. Wage and Hour Claims Miller contends the trial court erred in granting RAC and RTA's motion for summary judgment on his wage and hour claims. Miller maintains that RAC and RTA only paid him for six weeks of accrued vacation time even though he was entitled to eight weeks' pay. Miller asserts that RTA is liable for these two weeks of vacation pay because RTA owns a controlling interest in FOC. In their traditional motion for summary judgment, RAC and RTA assert that they are not liable for these wages as a matter of law because they transferred their liability for Miller's wage and hour claims to FOC. In his affidavit, William Wallisch states: 384 In connection with the creation of Flight Options, L.L.C., Travel Air and Flight Options, Inc. agreed that Flight Options, L.L.C. would assume any and all liabilities related to any vacation time that had been accrued by Travel Air pilots, including Plaintiff, prior to the this [sic] transaction. An examination of the combination agreement confirms Wallisch's statements. This undisputed evidence establishes as a matter of law that RAC and RTA transferred their liability for Miller's wages to FOC. See TEX.R. CIV. P. 166a(c); KPMG Peat Marwick, 988 S.W.2d at 748. The only evidence Miller cites in support of his wage and hour claims against RAC and RTA is Wallisch's testimony that RTA owns a controlling interest in FOC. The fact that RTA now owns a controlling interest in FOC does not make it liable for these wages. FOC is organized as a Delaware limited liability company and under Delaware law, the members of an L.L.C. are generally not liable for the obligations of the L.L.C., absent a showing that the court should pierce the corporate veil. See DEL.CODE ANN. tit. 6, § 18-303(a) (2005); Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983, 987-89 (Del.Ch.1987). The trial court therefore properly granted summary judgment on Miller's wage and hour claims against RAC and RTA. Conclusion We hold that (1) the trial court did not abuse its discretion in refusing to strike William Wallisch's affidavit, (2) RAC and RTA established that they terminated Miller's employment for a reason other than his refusal to perform illegal acts, negating the causation required for a Sabine Pilot claim as a matter of law, (3) the Airline Deregulation Act of 1978 preempts Miller's Sabine Pilot wrongful discharge claim against FOC, and (4) the trial court properly granted summary judgment on Miller's breach of contract and common law claims. We therefore affirm the trial court's orders granting summary judgment. NOTES [1] Sabine Pilot Serv., Inc. v. Hauck, 687 S.W.2d 733, 735 (Tex.1985). [2] 49 U.S.C. § 41713(b)(1) (2000). [3] FOC also maintains that the trial court's summary judgment properly disposed of Miller's wrongful discharge claim because he was fired for reasons other than his refusal to perform an illegal act, and any action that FOC requested him to take would not have resulted in criminal penalties. As we agree with FOC's preemption argument, we do not address the other potential grounds for the trial court's summary judgment. [4] The Texas Supreme Court consolidated two negligence cases for the Kiefer opinion. Cont'l Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 275 (Tex.1996). In the first case, a passenger was injured when a briefcase fell from an overhead storage bin and struck her on the head. Id. In the second case, the plaintiff claimed he was injured by the airline's negligent failure to provide meet and assist services. Id. at 275-76. [5] Miller contends FOC's certificate was not properly before the trial court because it was not attached to FOC's supplemental motion for summary judgment. FOC produced the certificate for the first time in its reply to Miller's response to the supplemental motion for summary judgment. Miller did not move to strike this evidence and the trial court noted that it considered the "pleadings on file" in its summary judgment order. As the Texas Supreme Court has explained, the trial court's ruling on a summary judgment is based upon the "issues raised in the motion, response, and any subsequent replies." Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex.1993). The certificate was therefore properly before the trial court. [6] Additionally, we note that Congress amended the ADA in the year 2000 and added a provision creating a federal whistleblower cause of action for employees discharged or discriminated against for reporting an employer's violations of federal law. 49 U.S.C. § 42121 (2000). This whistleblower cause of action provides a uniform system of recourse for employees discharged or discriminated against for reporting their employers' violations of federal law. Id. While we recognize that Miller was not a whistleblower in this case, he had an available remedy if FOC had terminated him for reporting a violation of federal law. See id. The fact that federal law expressly addresses whistleblower claims against air carriers strengthens our conclusion that the ADA preempts Miller's Sabine Pilot wrongful discharge claim arising from his refusal to fly aircraft in violation of federal law. Compare Delta Air Lines, Inc. v. Black, 116 S.W.3d 745, 756 (Tex.2003) (finding preemption of contract claim where FAA had created regulations to resolve dispute involved in plaintiff's breach of contract claim), with Kiefer, 920 S.W.2d at 281 (finding no preemption of common law negligence claims when Congress and FAA had created no method to resolve disputes involving negligence); see also Botz v. Omni Air Int'l, 286 F.3d 488, 496 (8th Cir.2002) (noting that whistleblower statute evidences Congress's intent to preempt state law whistleblower claims related to air safety); but see Branche v. Airtran Airways, Inc., 342 F.3d 1248, 1260 (11th Cir.2003) (holding safety inspector's state law whistleblower claim was not preempted by ADA because claim was not related to air carrier services). [7] The Fourteenth Court of Appeals has held that "[a] promise to provide employment which is subject to termination at any time or for any reason does not provide any assurances about the employer's future conduct, and does not provide a basis for detrimental reliance as a matter of law." Collins v. Allied Pharmacy Mgmt., Inc., 871 S.W.2d 929, 937 (Tex.App.-Houston [14th Dist.] 1994, no writ). [8] In Collins, the Fourteenth Court of Appeals noted the absurdity of this result: "[W]e believe Roberts abrogates the employment at will doctrine in all cases where the employee must quit an existing job to accept a new offer of employment. Also, we find it would be illogical to hold that an employee has no remedy if he is fired one week after commencing work, but may recover damages if the employer refuses to allow him to commence work at all." 871 S.W.2d at 937. [9] In his appellate brief, Miller also complains about additional negligent misrepresentations concerning flight releases RTA issued to its pilots. Miller did not plead these misrepresentations and the parties did not address them in their summary judgment motions. We cannot address these misrepresentations on appeal because they were not presented to the trial court. TEX R. CIV. P. 166a(c) ("Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as ground for reversal."); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 675 (Tex.1979) (holding issues not expressly presented to trial court may not be considered on appeal as ground for reversal of summary judgment).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1341660/	536 S.E.2d 511 (2000) 272 Ga. 884 JONES v. The STATE. No. S00A1387. Supreme Court of Georgia. October 10, 2000. 512 Timothy W. Hoffman, Decatur, for appellant. J. Tom Morgan, District Attorney, Barbara B. Conroy, Maria Murcier-Ashley, Kristin L. Wood, Assistant District Attorneys, Thurbert E. Baker, Attorney General, Paula K. Smith, Senior Assistant Attorney General, Adam M. Hames, Assistant Attorney General, for appellee. CARLEY, Justice. A jury found Melvin Jones guilty of the felony murder of his three-month-old daughter while in the commission of the offense of cruelty to children. The trial court entered a judgment of conviction on the jury's verdict and sentenced Jones to life imprisonment. The trial court denied Jones' motion for new trial, and he appeals.[1] 1. Construed most favorably for the State, the evidence shows that, before the victim was born, Jones beat her mother, Tonya Andrews, in an effort to cause a miscarriage. He also used a belt or his hands to strike the three other young children in the family. Jones testified that, while Ms. Andrews was out, he grabbed the victim from her crib by one of her arms and dropped her about 15 inches above the bed, as he had done before. After Ms. Andrews returned, Jones threatened and yelled at her. When the baby began to cry, Jones went to check on her, and Ms. Andrews fell asleep. When Ms. Andrews awoke, Jones told her that the child was not breathing. Paramedics could not resuscitate the victim, who had been dead for about 30 minutes. Jones began crying and said it was his fault. The medical examiner testified that, although the victim otherwise was in good health, one of her ribs was broken within the 24 hours preceding her death, and two others were broken two to three weeks earlier. The cause of death was a subdural hematoma, resulting from a blunt trauma to the head likely occurring between 12 and 16 hours prior to death. There was also evidence of shaken baby syndrome, which probably contributed to the victim's death. The evidence is sufficient to support a finding that, while the victim was in Jones' care, he fatally struck or shook her. Carter v. State, 269 Ga. 420, 422(1), 499 S.E.2d 63 (1998). Accordingly, a rational 513 trier of fact could have found proof beyond a reasonable doubt of Jones' guilt of felony murder while in the commission of child cruelty. Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979); Johnson v. State, 269 Ga. 632, 501 S.E.2d 815 (1998); Carter v. State, supra. Compare Johnson v. State, 269 Ga. 840, 506 S.E.2d 374 (1998). 2. After Jones expressed dissatisfaction with the public defender appointed to represent him, the trial court released her but refused to appoint another attorney. Thereafter, the public defender and Jones reconciled, but Jones again became dissatisfied, and the trial court required that Jones either accept representation by the public defender or represent himself. Jones chose to act as his own attorney, but contends on appeal that he did not validly waive his right to counsel and that the trial court should have appointed a new attorney to represent him. Jones denies that he engaged in any dilatory tactics and he relies upon the trial court's failure to establish, as suggested by Raines v. State, 242 Ga.App. 727, 729(1), 531 S.E.2d 158 (2000), that he apprehended the nature of the charges, the range of allowable punishments, potential defenses and mitigating circumstances, and any possible lesser included offenses such as voluntary or involuntary manslaughter. However, this Court has held that it is not incumbent upon the trial court to make each of these inquiries. "The record need only reflect that the accused was made aware of the dangers of self-representation and nevertheless made a knowing and intelligent waiver. [Cits.]" Wayne v. State, 269 Ga. 36, 38(2), 495 S.E.2d 34 (1998). The trial court was authorized to find that Jones set forth no justifiable basis for dissatisfaction with the public defender and, therefore, that he "was attempting to use the discharge and [appointment] of other counsel as a dilatory tactic, which was `the functional equivalent of a knowing and voluntary waiver of appointed counsel.'" Bryant v. State, 268 Ga. 616, 617(2), 491 S.E.2d 320 (1997). See also Hobson v. State, 266 Ga. 638(2), 469 S.E.2d 188 (1996). "`The essential aim of the Sixth Amendment is to guarantee effective assistance of counsel, not to guarantee a defendant preferred counsel or counsel with whom a "meaningful relationship" can be established.'" [Cits.] Battle v. State, 234 Ga.App. 143, 144(2), 505 S.E.2d 573 (1998). Furthermore, the public defender testified that she made Jones fully aware of the nature of the charge, the possible sentences, and the dangers of self-representation. According to Jones' own testimony, he completely understood that, if he rejected appointed counsel, he would have to represent himself. The trial court endeavored to convince Jones to accept the public defender, informing him and his mother about his right to counsel and the qualifications of the public defender. Under all the circumstances, we conclude that Jones knowingly and intelligently waived his right to counsel after he was made aware of the dangers of self-representation. Simpson v. State, 238 Ga.App. 109, 111-112(1), 517 S.E.2d 830 (1999). Jones further urges that the prosecutor's failure to take a more active role invalidates the waiver of counsel. In making this contention, however, Jones erroneously assumes that he has the right to receive effective legal assistance from the prosecutor. The trial court is responsible for ensuring a valid waiver of counsel, and did so. See Wayne v. State, supra. 3. Jones urges that the trial court erred in failing to instruct on involuntary manslaughter. Throughout the trial, however, Jones took the position that he did not cause the fatal injury. See Mills v. State, 187 Ga.App. 79, 80(3), 369 S.E.2d 283 (1988). Thus, there was no evidence to support such a charge. Moreover, Jones did not request an instruction on involuntary manslaughter. A trial court does not err in failing to give, sua sponte, an instruction on a lesser included offense in the absence of a written request therefor. Gadson v. State, 264 Ga. 280, 281(2), 444 S.E.2d 305 (1994). Compare Tarvestad v. State, 261 Ga. 605, 409 S.E.2d 513 (1991) (failure to charge without request on sole defense, rather than lesser included offense). 4. Jones also contends that the trial court erred by admitting similar transaction evidence, because the State's notice of intent to introduce this evidence was untimely under *514 Uniform Superior Court Rule 31.3 and because the trial court made no specific findings in compliance with Williams v. State, 261 Ga. 640, 409 S.E.2d 649 (1991). Jones made no objection at trial on either of these grounds and, thus, has waived appellate review thereof. Murphy v. State, 270 Ga. 72, 73(2)(a), 508 S.E.2d 399 (1998); Williams v. State, 267 Ga. 308, 310(3), 477 S.E.2d 570 (1996). Judgment affirmed. All the Justices concur. NOTES [1] The crime occurred on July 24, 1995. The grand jury returned its indictment on October 17, 1995. The jury found Jones guilty on August 22, 1996, and, on the same day, the trial court entered the judgment of conviction and sentence. Jones filed a motion for new trial on September 6, 1996, and amended it on September 9, 1999, and February 9 and 11, 2000. The trial court denied that motion on February 28, 2000, and Jones filed a notice of appeal on March 28, 2000. The case was docketed in this Court on May 4, 2000 and submitted for decision on July 3, 2000.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1365281/	142 Ga. App. 562 (1977) 236 S.E.2d 550 SOUTHEASTERN FIDELITY INSURANCE COMPANY v. STEVENS. 53966. Court of Appeals of Georgia. Submitted June 6, 1977. Decided June 15, 1977. 563 Young, Young, Ellerbee & Clyatt, F. Thomas Young, for appellant. Barham & Bennett, Ed G. Barham, for appellee. DEEN, Presiding Judge. 1. It is first contended that the death did not arise out of the use or operation of the truck. This clause, a common one in motor vehicle insurance policies, has been subject to construction in other states, and it is usually interpreted in a broad sense for the usual reasons: that it is ambiguous, or should be construed in favor of the insured, or against the party drafting it, and the burden of proving an exclusion is on the insurer. Carter v. Bergeron, 102 N. H. 464 (160 A2d 348), follows the majority rule in holding that the term "arising out of" does not mean proximate cause in the strict legal sense, nor require a 564 finding that the injury was directly and proximately caused by the use of the vehicle, nor that the insured vehicle was exerting any physical force upon the instrumentality which was the immediate cause of the injury. That almost any causal connection or relationship will do, see Travelers Ins. Co. v. Aetna Cas. & Sur. Co., 491 S.W.2d 363: "Case law indicates that the injury need not be the proximate result of `use' in the strict sense, but it cannot be extended to something distinctly remote. [Cit.] Each case turns on its precise individual facts. The question to be answered is whether the injury `originated from,' `had its origin in,' `grew out of,' or `flowed from' the use of the vehicle." In that case a gun was accidentally discharged for unknown reasons while being loaded into the vehicle; the car was therefore being "used" for this purpose, and from this use the accident originated. For other cases involving specifically the discharge of a firearm during the loading, unloading, or operation of a motor vehicle, see 89 ALR2d 150, Anno. We are satisfied that where a connection appears between the "use" of the vehicle and the discharge of the firearm and resulting injury such as to render it more likely that the one grew out of the other, it comes within the coverage defined. 2. It is contended, however, that this result can be reached only by inferences arising from circumstantial evidence, and that equally strong inferences can be drawn to the opposite effect, so that recovery on any theory based on circumstantial evidence is insufficient. This argument is best disposed of in McCarty v. National Life &c. Ins. Co., 107 Ga. App. 178 (2) (129 SE2d 408). "Where a plaintiff in a civil case supports his case solely by circumstantial evidence, before he is authorized to have a verdict in his favor the testimony must be such as to reasonably establish the theory relied on. There must be more than a `scintilla' of circumstances to carry the case to the jury. It is for the court to say whether the circumstances reasonably establish the hypothesis relied on by the plaintiff. If the evidence meets this test, it is then for the jury to say, either that the plaintiff has not carried his burden of proof because the evidence equally supports his hypothesis and some other reasonable hypothesis, or that the plaintiff has carried his burden of proof in that the *565 evidence preponderates to his hypothesis as against all other reasonable but less probable hypotheses." This correctly describes the concurrent duties of judge and jury in a jury trial, or the two steps by which the judge must proceed where, as here, a bench trial is involved. In the McCarty case the deceased was covered if his fall was accidental and led to the regurgitation and consequent asphyxia from which he died, but not if the deceased suffered an attack related to a bodily infirmity which led to his asphyxia, and death, after which he fell. The facts in evidence offered support to either theory therefore, there was the required scintilla of evidence upon which alone the court might rule. Thereafter it was the jury's responsibility to decide whether the hypotheses were equally supported or whether one or the other predominated. In the case at bar it is conceded that the pistol discharged accidentally, and that it did so almost immediately after the car turned off of a smooth paved road and commenced traveling on a bumpy, rutted, unpaved road, apparently while being handled by the deceased. The inference that there is a connection between these facts is authorized. No other explanation of the occurrence is advanced. The judge in his capacity as trior of fact was authorized to find that the former hypothesis prevailed over the latter, and this court cannot say as a matter of law that the two are of equal weight. The trial court did not err in entering up judgment in favor of the plaintiff. Judgment affirmed. Webb and Marshall, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1318416/	106 Wash. 2d 569 (1986) 723 P.2d 1135 THE CITY OF BREMERTON, Respondent, v. JACK CORBETT, Petitioner. THE CITY OF BREMERTON, Respondent, v. MARY A. CARR, Petitioner. THE CITY OF BREMERTON, Respondent, v. KIM DUANE LEBEDA, Petitioner. THE CITY OF BREMERTON, Respondent, v. SHERRIE G. BURKHART, Petitioner. No. 52272-3. The Supreme Court of Washington, En Banc. August 21, 1986. Roof, Tolman & Kirk, by Jeffrey L. Tolman, for petitioner Corbett. Crawford, McGilliard, Peterson & Yelish, by Michael E. Klemetsrud, for petitioners Carr, et al. William Broughton, City Attorney, and Mary B. Killian, Assistant, for respondent. 571 BRACHTENBACH, J. The City of Bremerton charged the petitioners, Mary A. Carr, Kim Duane Lebeda, and Sherrie G. Burkhart, with driving while intoxicated. RCW 46.61.502. Jack Corbett was charged with being in actual physical control of a vehicle while intoxicated. RCW 46.61.504. The charges arose from separate incidents. The municipal court dismissed each charge. Relying upon State v. Hamrick, 19 Wash. App. 417, 576 P.2d 912 (1978), the court held that the City had not proved the corpus delicti thereby precluding the admission of any confession or admission. The Superior Court affirmed. The Court of Appeals reversed, thereby reinstating the charges. Bremerton v. Corbett, 42 Wash. App. 45, 708 P.2d 408 (1985). We affirm the Court of Appeals, but on slightly different grounds. The facts of each case assuming as we must the truth of the City's evidence and all reasonable inferences therefrom in a light most favorable to the City may be summarized as follows: Bremerton v. Carr In the early morning hours of February 26, 1983, a Ford Pinto registered to Mary Carr was struck by a vehicle driven by Susan Sheldon. When Officer Scott arrived a few minutes later, Carr was standing between the two cars. Ms. Sheldon remained in her vehicle. There were two other persons in the Pinto. When the officer asked who had been driving the cars, Carr walked up to him, license in hand, and said, "I'm the driver of the Pinto." The officer noticed that Carr seemed intoxicated so he put her in his patrol car. The officer later asked the person seated in the front passenger side of the Pinto to move the car. She was unable to start the Pinto after several attempts. The Pinto had a manual transmission and she apparently tried to start the car without depressing the clutch pedal or putting it in neutral. The officer had no trouble starting and moving the car. 572 Bremerton v. Burkhart At about 11:30 p.m. on March 27, 1983, a car towing a small trailer failed to negotiate a corner and went over an embankment. Moments after hearing the noise of the accident, a witness observed a bystander helping a woman with a small child out of the passenger side of the car and up the embankment to the street. The bystander returned to the car and helped another woman up the embankment. When Officer Johnson arrived at the scene of the accident shortly thereafter, there was no one near the car. He determined that Sherrie Burkhart was the registered owner of the car. Burkhart was contacted at her residence and brought back to the accident scene, where she then admitted that she had been driving the car at the time of the accident. Earlier in the evening Burkhart had dropped off her boyfriend, Mark Sarber, at their residence and had driven off with their small child and Sarber's sister, who had only been in Bremerton for a week and was relatively unfamiliar with the city. Burkhart returned to the house later that evening on foot carrying their child. She was crying and told Sarber that she had been in a wreck. The accident had occurred two blocks from the house. Bremerton v. Lebeda On April 24, 1982, Officer Carver was dispatched to investigate a 2-car collision. Both of the vehicles, a GMC pickup truck and a Mercury, were extensively damaged in the left front area. Although neither vehicle was occupied when he arrived, Officer Carver contacted three people who were near the scene of the accident: Kim Lebeda, Jack Harper and a Mr. Parker. Lebeda and Parker were assisting Harper, who was bleeding profusely from head injuries. On three occasions, Harper tried to walk toward the Mercury, which had a shattered windshield and a bloodstained driver's compartment, including some hair and blood on the windshield. The pickup truck was registered to Lebeda, who lived a few 573 blocks from the accident site. Officer Carver observed that Lebeda had freshly bruised and scraped knees and that his eyes were red and his speech was slurred. Lebeda admitted that he had been driving the pickup. Parker, who was uninjured and said he was just walking by, was questioned and allowed to leave. Bremerton v. Corbett At approximately 11 p.m. on the evening of March 17, 1983, Officer Long noticed a car stopped at an intersection in the inside lane of a busy city street. Jack Corbett was looking under the hood. The officer then saw Corbett get into the driver's seat. Officer Long approached the vehicle. Although he did not see any keys in the ignition, he noticed that the ignition switch was on. The keys were found on the car floor near the driver's seat. No other person was near the car. The officer observed that Corbett appeared intoxicated. Corbett admitted that he had been driving the car. In each of these cases, which were consolidated on appeal, the City sought to introduce petitioners' admissions of driving into evidence. However, the municipal court, in dismissing the charge in each case, held that the City had presented insufficient evidence of the corpus delicti independent of petitioners' statements, thus precluding their admission into evidence. The Court of Appeals reversed. It held that corroborating independent evidence of the corpus delicti is required "only for admissions elicited by police questioning in circumstances requiring Miranda warnings." Bremerton v. Corbett, supra at 51. Consequently, the court concluded that the City had in each case presented sufficient evidence of corpus delicti. We affirm. Although we agree with petitioners that the Court of Appeals erred in holding that only confessions or admissions elicited in a Miranda setting need be corroborated, we conclude that the City adduced sufficient prima facie evidence of the corpus delicti independent of petitioners' admissions. Corpus delicti usually consists of two elements: (1) an 574 injury or loss (e.g., death or missing property) and (2) someone's criminal act as the cause thereof. To sustain a conviction, there also must be proof that the defendant was the actor. State v. Meyer, 37 Wash. 2d 759, 763, 226 P.2d 204 (1951). Proof of the identity of the person who committed the crime is not part of the corpus delicti, which only requires proof that a crime was committed by someone. [1] However, State v. Hamrick, supra, recognized that proof of the corpus delicti in a case charging driving or being in physical control of a vehicle while intoxicated differs from many crimes where identity is not an element of the corpus delicti. Hamrick, at 419. Proof that a car ran off the road, caused an accident or stopped in a traveling lane does not establish that an element of the offense was committed. Likewise, proof that someone was intoxicated does not prove that that person drove or was in control of the car. Inherent in the offense is the requirement that the intoxicated person was the driver or was in control. The corpus delicti cannot be proved without proving someone's criminal agency which in turn requires identification of a particular individual who is under the influence. Thus, as in Hamrick, the corpus delicti of the offenses charged here cannot be established absent proof connecting the petitioners with operation or control of a vehicle while intoxicated. Petitioners contend that the City failed to introduce sufficient evidence of the corpus delicti independent of their admissions of driving. This argument involves application of the so-called "corpus delicti rule." An oft-cited and traditional statement of this rule, as adopted in Washington, is found in State v. Meyer, supra: The confession of a person charged with the commission of a crime is not sufficient to establish the corpus delicti, but if there is independent proof thereof, such confession may then be considered in connection therewith and the corpus delicti established by a combination of the independent proof and the confession. The independent evidence need not be of such a character as would establish the corpus delicti beyond a reasonable doubt, or even by a preponderance of the proof. 575 It is sufficient if it prima facie establishes the corpus delicti. (Citations omitted.) Meyer, at 763-64. This requirement of independent proof of the corpus delicti is equally applicable to a defendant's extrajudicial confessions and admissions.[1]See State v. Hamrick, 19 Wash. App. 417, 419, 576 P.2d 912 (1978). Here the City sought to rely upon petitioners' admissions of driving to establish the corpus delicti of the offenses of driving or being in physical control of a vehicle while intoxicated. It was thus incumbent upon the City to introduce prima facie evidence of the corpus delicti independent of petitioners' admissions. In applying the corpus delicti rule, however, the Court of Appeals initially held that not all admissions need be corroborated; corroboration is required only for those statements elicited by police questioning in circumstances requiring Miranda warnings i.e., in a custodial police interrogation. See Miranda v. Arizona, 384 U.S. 436, 16 L. Ed. 2d 694, 86 S. Ct. 1602, 10 A.L.R. 3d 974 (1966). Consequently, the Court of Appeals considered the admissions of petitioners Carr and Burkhart in determining whether there was prima facie evidence of the corpus delicti. Petitioners contend that this was error. We agree. The Court of Appeals reasoned that since the purpose of the corpus delicti rule is to protect against potential police abuses, it follows that only admissions elicited in a custodial police interrogation require corroboration. This limitation of the scope of the corpus delicti rule is without precedent or authority. Nor is it consistent with the historical justification for the rule. The rule requiring independent corroboration of extrajudicial confessions and admissions is one of the oldest confession doctrines. See generally 7 J. Wigmore, Evidence §§ 576 2070-71 (rev. 1978); Comment, California's Corpus Delicti Rule: The Case for Review and Clarification, 20 U.C.L.A.L. Rev. 1055, 1058-65 (1973). Unlike the principles enunciated in Miranda v. Arizona, supra, and the development of similar constitutional doctrines relating to the voluntariness of confessions, the corpus delicti rule does not have a constitutional source; it is traceable to English law and was early established in America. E.g., People v. Hennessey, 15 Wend. 147 (N.Y. 1836); People v. Jones, 31 Cal. 566 (1867); State v. Marselle, 43 Wash. 273, 86 P. 586 (1906). See 7 J. Wigmore, supra; Note, Proof of the Corpus Delicti Aliunde the Defendant's Confession, 103 U. Pa. L. Rev. 638 (1955). The corpus delicti rule was established by the courts to protect a defendant from the possibility of an unjust conviction based upon a false confession alone. See Smith v. United States, 348 U.S. 147, 99 L. Ed. 192, 75 S. Ct. 194 (1954); 7 J. Wigmore, at §§ 2070-71. The requirement of independent proof of the corpus delicti before a confession is admissible was influenced somewhat by those widely reported cases in which the "victim" returned alive after his supposed murderer had been tried and convicted, and in some instances executed. See, e.g., Perrys' Case, 14 Howell's State Trials 1311 (1660); Trial of Stephen and Jesse Boorn, 6 American State Trials 73 (1819). See generally State v. Howard, 102 Or. 431, 203 P. 311 (1921); Note, 103 U. Pa. L. Rev. at 646-47. It arose from judicial distrust of confessions generally, coupled with recognition that juries are likely to accept confessions uncritically. Developments in the Law Confessions, 79 Harv. L. Rev. 935, 1073 (1966); Note, 103 U. Pa. L. Rev. at 642-43. See Smith v. United States, supra. This distrust stems from the possibility that the confession may have been misreported or misconstrued, elicited by force or coercion, based upon mistaken perception of the facts or law, or falsely given by a mentally disturbed individual. Note, 103 U. Pa. L. Rev. at 642-46; Note, Confession Corroboration in New York: A Replacement for the Corpus Delicti Rule, 46 Fordham L. Rev. 1205 (1978). Thus, it is clear that the corpus delicti 577 rule was established to prevent not only the possibility that a false confession was secured by means of police coercion or abuse but also the possibility that a confession, though voluntarily given, is false. See Smith v. United States, supra at 153; Note, Criminal Law Confessions Admissibility of Corroborative Evidence, 42 N.C.L. Rev. 219, 221 (1963). [2] Given the justification for the corpus delicti rule, it makes no sense to limit its application, as did the Court of Appeals here, to admissions elicited in circumstances requiring Miranda warnings i.e., in a custodial police interrogation. The danger that an admission is false though voluntarily made is present both when it is made under custodial interrogation and when it is not. Consequently, there is no discernible basis for requiring corroboration of one and not the other. If the only justification for retention of the corpus delicti rule is to protect defendants against coerced or involuntary confessions, then the Court of Appeals test as to when an admission must be corroborated is perhaps defensible. Cf. Miranda v. Arizona, supra (custodial interrogation implicates Fifth Amendment privilege against self-incrimination). However, such is not the case. Thus petitioners' admissions, whether made in a Miranda setting or not, require corroboration under the corpus delicti rule. In so holding, we are not unmindful of the criticism that the corpus delicti rule has drawn from courts and legal commentators. See, e.g., 7 J. Wigmore, supra; C. McCormick, Evidence § 145 (3d ed. 1984); Note, 46 Fordham L. Rev. 1205; 79 Harv. L. Rev. at 938; Comment, 20 U.C.L.A.L. Rev. 1055. It has been suggested that the rule may have "outlived its usefulness" in light of the development of other safeguards that protect against unreliable confessions. C. McCormick, supra at 370-71. Others have questioned the extent to which the corpus delicti rule continues to serve its original purposes. See, e.g., Note, 46 Fordham L. Rev. at 1216. Although the vast majority of jurisdictions, including Washington, still adhere to the rule requiring 578 independent evidence of the corpus delicti, see Annot., Corroboration of Extrajudicial Confession or Admission, 45 A.L.R. 2d 1316 (1956) (and cases collected therein), the federal courts and a growing number of state courts have opted for a more flexible rule for corroborating confessions than the rigid rule requiring independent proof of all elements of the corpus delicti; under this rule, the corroborative evidence need only tend to establish the trustworthiness of the confession. See, e.g., Opper v. United States, 348 U.S. 84, 99 L. Ed. 101, 75 S. Ct. 158 (1954); State v. Parker, 315 N.C. 222, 337 S.E.2d 487 (1985); State v. Yoshida, 44 Haw. 352, 354 P.2d 986 (1960); State v. George, 109 N.H. 531, 257 A.2d 19 (1969). The City asks this court to reexamine our adherence to the corpus delicti rule. However, we decline to do so. Because of the inadequate briefing on this issue and our ultimate disposition of this case, reexamination of the corpus delicti rule is best left for another day and more compelling facts. We turn now to the basic issue in this case: Did the City present sufficient evidence of the corpus delicti independent of petitioners' admissions? [3] As noted above, the independent proof is sufficient if it prima facie establishes the corpus delicti, which in this case is met by proof that petitioners were driving or in actual physical control of a vehicle while intoxicated.[2] The independent evidence need not be sufficient to support a conviction or even to send the case to the jury. State v. Fellers, 37 Wash. App. 613, 615, 683 P.2d 209 (1984); State v. Fagundes, 26 Wash. App. 477, 484, 614 P.2d 198, 625 P.2d 179, review denied, 94 Wash. 2d 1014 (1980). Nor is it necessary that the evidence exclude every reasonable hypothesis consistent with petitioners not driving a car. "Prima facie", in this context, means only that there be evidence of sufficient 579 circumstances which would support a logical and reasonable inference that petitioners were driving or in actual physical control of a vehicle. State v. Hamrick, supra at 419; State v. DePriest, 16 Wash. App. 824, 560 P.2d 1152 (1977). We conclude, as a matter of law, that the City met its burden in establishing prima facie evidence of the corpus delicti in each of the cases here. Our holding is consistent with State v. Hamrick, supra. In that case, there was no independent evidence connecting defendant with control of a vehicle other than his presence at the scene of the 2-vehicle accident. Thus, the Court of Appeals correctly held that the State had failed to sufficiently establish the corpus delicti. In each of the cases here, however, not only were the petitioners (except Burkhart) at the scene when the police arrived, they were also the registered owners of a vehicle there. While this evidence alone may not be sufficient, especially when there are other persons present, in each of the cases here there was additional circumstantial evidence connecting petitioners with control of their vehicles. Petitioner Carr was standing near the Pinto registered to her when the police arrived at the scene of the accident. Another person was in the front passenger seat. This person was unable to start the car several times when requested to by the police, although the police officer had no trouble doing so. This evidence will support a reasonable inference that Carr was the driver of the Pinto. In petitioner Burkhart's case, although there was no one at the scene of the single car accident when the investigating officers arrived, the evidence suggests that Burkhart and Sarber's sister were both in the car when it went over the embankment. In addition, the evidence will support an inference that Burkhart was the driver. She was the registered owner of the car, she was last seen driving the car earlier in the evening with Sarber's sister in the passenger seat, and Sarber's sister was unfamiliar with the area whereas Burkhart was not. In petitioner Lebeda's case, the following evidence prima 580 facie establishes that he was the driver of the pickup: (1) The Mercury's cracked windshield and bloodstained passenger compartment are consistent with Harper's injuries and thus suggest that he drove the Mercury. (2) The only other vehicle involved in the accident was the pickup registered to Lebeda. (3) Lebeda's injuries are consistent with his involvement in an accident. (4) The only other person near the accident scene said that he was a passerby, had no apparent injuries, and showed no concern for either vehicle. As for petitioner Corbett, there was sufficient prima facie evidence of his actual physical control of the vehicle to allow consideration of his admission. The car was stalled on the inside lane of a busy city street. Corbett was sitting in the driver's seat. He was the registered owner and no one else was near the car. The car keys were on the floor below him and the ignition was on. Although the car may have been inoperable, the evidence permits a legitimate inference that Corbett drove the vehicle until it stalled and was still in physical control of it when the police arrived on the scene. See State v. Smelter, 36 Wash. App. 439, 674 P.2d 690 (1984). See also Commonwealth v. Taylor, 237 Pa. Super. 212, 352 A.2d 137 (1975); State v. Ghylin, 250 N.W.2d 252 (N.D. 1977). We thus affirm the Court of Appeals decision insofar as it held that there was sufficient prima facie evidence of the corpus delicti in each of the cases here so as to warrant consideration of petitioners' admissions. Accordingly, the orders dismissing the charges against petitioners are reversed and the cases remanded to the district court. DOLLIVER, C.J., and UTTER, DORE, PEARSON, ANDERSEN, CALLOW, and GOODLOE, JJ., concur. DURHAM, J. (concurring) I would have preferred to reconsider the corpus delicti rule. Nonetheless, I concur in the result reached by the majority. NOTES [1] In these cases we need not distinguish between an admission and a confession. For the difference see, e.g., State v. Karumai, 101 Utah 592, 126 P.2d 1047, 1052 (1942); see generally C. McCormick, Evidence § 144 (3d ed. 1984); cf. State v. Jones, 65 Wash. 2d 449, 397 P.2d 815 (1964). [2] The question of petitioners' intoxication is not before us on appeal. Thus, for purposes of review, we will assume that the City introduced sufficient evidence of this element of the corpus delicti.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1573395/	396 S.W.2d 911 (1965) Johnny Preston WILLIAMS, Jr., et al., Appellants, v. Wilbur HILL, Appellee. No. 16628. Court of Civil Appeals of Texas, Dallas. November 19, 1965. 912 Ronald R. Waldie and Irwin Massman, Dallas, for appellants. Bailey & Williams and G. David West-fall, Dallas, for appellee. CLAUDE WILLIAMS, Justice. This is an appeal from a summary judgment. The suit was originally instituted by Johnny Preston Williams, Jr., Richard Stanley Dickerson and Franklin Dickerson, as plaintiffs, against Wilbur Hill, as defendant, seeking to recover property damage and personal injuries allegedly sustained as a result of an automobile collision. The trial court sustained a summary judgment against Johnny Preston Williams, Jr. and Richard Stanley Dickerson and severed the cause of action of those two plaintiffs from that of Franklin Dickerson. The appeal of Johnny Preston Williams, Jr. and Richard Stanley Dickerson from the summary judgment against them was dismissed by us. Williams v. Hill, Tex.Civ.App., 392 S.W.2d 759. The trial court then sustained a motion for summary judgment against Franklin Dickerson and he attacks that decree in this appeal, contending in his sole point of error that the evidence considered by the court raised a material fact issue. In his second amended original answer Wilbur Hill alleged that Franklin Dickerson had released any and all claims incurred. In his motion for summary judgment Hill attaches the release executed by Franklin Dickerson on June 9, 1964 and also an affidavit of Timothy M. Carr, in which he states that Dickerson signed the release in his presence. The release appears to be regular in form and recites that Dickerson acknowledges receipt of the sum of $10, which sum is accepted in full settlement and satisfaction of, and as sole consideration for the full release and discharge of, all claims, actions and demands whatso-ever, against Wilbur Hill on account of the injuries and property damage growing out of an accident which occurred on May 16, 1964. By first supplemental petition Dickerson alleged, under oath, "no consideration existed or passed to said plaintiff." In his answer to the motion for summary judgment Dickerson alleged that there was a genuine fact question relating to the "sufficiency of the consideration" and "that the deposition of Timothy M. Carr, referred to in defendant's motion for summary judgment contains genuine issues of fact relating to fraud * ." In his affidavit attached to his answer to the motion for summary judgment Dickerson states that "no consideration existed or passed to me" and "further that Timothy M. Carr's deposition, referred to in defendant's said motion for summary judgment raises inferences of fraud perpetrated upon me." The deposition of Carr does not appear in this record. We hold that the court's action in sustaining this motion for summary judgment was correct. We recognize the rule, now well established in our law, that the burden of proving the nonexistence of issuable facts is upon the party moving for summary judgment, and all doubts as to existence of such facts must be resolved against the movant. The law is also well settled that when the moving party presents extrinsic evidence which establishes the absence of issues of fact then the burden is upon the opposing party to come forward with affidavits or other extrinsic evidence to oppose the motion. Such opposing affidavits are insufficient when they are made in the form of a mere general denial, or based on hearsay, or consist of statements that are nothing more than mere conclusions. 45 Tex.Jur.2d § 137, p. 613. 913 In this case appellee pleaded a written release executed by appellant as a bar to appellant's cause of action. Appellant did not deny the execution of the release but attempted to avoid the effect of same by contending that it was not supported by consideration. A written instrument reciting a consideration imports one. Miers & Rose v. Trevino, Tex.Civ.App., 213 S.W. 715, err. ref. This rule is applicable to release as well as other kinds of contracts. Warren v. Gentry, 21 Tex. Civ.App. 151, 50 S.W. 1025; Texas Central Ry. Co. v. Shirley, 62 Tex. Civ. App. 158, 130 S.W. 687. To offset this legal presumption of consideration it was incumbent upon appellant to present evidence legally admissible on the question of lack of consideration. This he attempted to do, not by statements of fact which would be admissible in evidence upon the trial of the case, but by mere conclusions of law. His statements in his affidavit that "no consideration existed or passed to me" and that Carr's deposition "raises inferences of fraud perpetrated upon me" are clearly recitations of legal conclusions and not statements of fact. What constitutes a consideration for a contract is a question of law. Whether inferences of fraud are available to vitiate a contract amounts to questions of law and not of fact. Since such statements would not be legally admissible on the trial of the case it necessarily follows that they cannot now support the proposition that they created issues of fact. Bates v. Smith, 155 Tex. 443, 289 S.W.2d 215; Box v. Bates, 162 Tex. 184, 346 S.W.2d 317; Allen v. Western Alliance Ins. Co., 162 Tex. 572, 349 S.W.2d 590; Sparkman v. McWhirter, Tex.Civ. App., 263 S.W.2d 832, wr. ref.; Schepps v. American District Telegraph Co. of Texas, Tex.Civ.App., 286 S.W.2d 684. Finally, appellant assails the release because the same was not witnessed nor executed before a notary public. No authority has been cited in support of this novel contention. We know of no law which requires a release such as the one revealed by this record to be either witnessed or executed before a notary public. Finding no reversible error reflected by this record the judgment of the trial court is affirmed. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1800799/	949 So. 2d 1266 (2007) Gloria SCOTT and Deania M. Jackson, on Behalf of Themselves and All Other Persons Similarly Situated v. The AMERICAN TOBACCO COMPANY, INC.; American Brands, Inc.; R.J. Reynolds Tobacco Company; RJR Nabisco, Inc.; Brown & Williamson Tobacco Corporation; Batus, Inc.; Batus Holdings, Inc.; Philip Morris, Inc.; Philip Morris Companies, Inc.; et al. No. 2004-CA-2095. Court of Appeal of Louisiana, Fourth Circuit. February 7, 2007. Rehearing Denied March 2, 2007. 1270 Joseph M. Bruno, Davis S. Scalia, Bruno & Bruno, Kenneth M. Carter, Kenneth M. Carter, PLC, New Orleans, Jack M. Bailey, Jr., Shreveport, Daniel E. Becnel, Jr., Law Office of Daniel E. Becnel, Jr., Reserve, Raul R. Bencomo, Bencomo & Associates, Robert L. Redfearn, Simon, Peragine, Smith & Redfearn, L.L.P., Russ M. Herman, Stephen J. Herman, Herman, Herman, Katz & Cotlar, LLP, New Orleans, Bruce C. Dean, Bruce C. Dean, LLC, Metairie, Deborah M. Sulzer, Attorney at Law, Stephen B. Murray, Stephen B. Murray, Jr., Murray Law Firm, Walter J. Leger, Jr., Christine L. DeSue, Leger & Mestayer, Meyer H. Gertler, Louis L. Gertler, Gertler, Gertler, Vincent & Plotkin, L.L.P., New Orleans, W. James Singleton, Singleton Law Firm, Shreveport, Paul H. Due', Due', Price, Guidry, Piedrahita & Andrews, Baton Rouge, Louis Roussel, III, Metairie, Michael X. St. Martin, St. Martin and Williams, Houma, Calvin C. Fayard, Jr, Fayard & Honeycuytt, Denham Springs, for Plaintiffs/Appellees. Carmelite M. Bertaut, Stone, Pigman, Walther, Wittman, L.L.C., New Orleans, Richard A. Schneider, Jack M. Williams, King & Spalding LLP, Atlanta, GA, for Appellant, Brown & Williamson Tobacco Corporation (now known as Brown & Williamson Holdings, Inc., individually and as successor by merger to The American Tobacco Company). Charles F. Gay, Jr., Ronald J. Sholes, Jeffrey E. Richardson, Christy F. Kane, Martin A. Stern, Adams and Reese LLP, New Orleans, for Appellants, Philip Morris USA, Inc. and The Tobacco Institute, Inc. Phillip A. Wittmann, Dorothy H. Wimberly, Stone Pigman Walther Wittmann L.L.C., New Orleans, Mark A. Belasic, Robert H. Klonoff, Kevin D. Boyce, Jones, 1271 Day, Cleveland, OH, for Appellant, R.J. Reynolds Tobacco Company. Steven W. Copley, Ernest E. Svenson, Gordon, Arata, McCollam, Duplantis & Eagan, LLP, New Orleans, Gary R. Long, Jennifer L. Brown, Nicholas P. Mizell, Shook, Hardy & Bacon, L.L.P., Kansas City, MO, for Appellant, Lorillard Tobacco Company. (Court composed of Judge MICHAEL E. KIRBY, Judge TERRI F. LOVE, Judge DAVID S. GORBATY, Judge LEON A. CANNIZZARO, JR., Judge ROLAND L. BELSOME). GORBATY, Judge. A class was certified as one for the establishment of a court-supervised medical monitoring and/or smoking cessation program fund. Following two phases of trial, a judgment was rendered whereby defendants[1], cigarette manufacturers and a public relations firm, were ordered to fund a smoking cessation program for class members who desired to quit smoking. Defendants appeal that judgment. For the following reasons, we affirm in part, amend in part, reverse in part, and remand. PROCEDURAL HISTORY: This lawsuit was originally filed on May 24, 1996, on behalf of Gloria Scott and Deania Jackson. In 1997 a class was certified to include all Louisiana residents who smoked on or before May 24, 1996, and who desired to participate in a monitoring and/or cessation program. Between 2000 and 2002, the trial court created a trial plan, which defendants claim was repeatedly altered. After many writ applications and remands addressing how the ultimate trial should proceed, the Supreme Court ordered that the trial court proceed with Phase I of the trial, assuming that the common issues of fault and causation could be tried during this phase along with any applicable class-wide affirmative defenses. The Louisiana Supreme Court further ordered that the trial court formulate a plan to try individualized issues thereafter. Following Phase I of the trial, the jury rendered a verdict whereby it rejected plaintiffs' product defect claim. Generalized findings in plaintiffs' favor were made with regard to the claims for fraud and breach of an assumed duty. However, no specific findings as to any individual plaintiff were made. The jury rejected plaintiffs' medical monitoring claim, but again made generalized findings in favor of a smoking cessation program. Subsequent to Phase I, the trial court issued Trial Order No. 10. The order included the trial court's assessment of what transpired during Phase I, and directives on what would transpire during Phase II and thereafter. The trial court determined that all common issues of liability (fault and causation, including the Bourgeois factors[2]), and all applicable class-wide defenses and affirmative defenses had been tried by the jury in Phase I. The jury had determined the need for a court administered smoking cessation program. The trial court further found that, based on the evidence adduced and the law, principles of comparative fault and assumption of the risk did not apply to the 1272 case. Further, there were no remaining liability issues to be tried on a class-wide basis. The trial court surmised that the plaintiffs' claims were for a single, common, unitary, equitable, court-supervised fund by the class as a whole. Therefore, the only issue of reliance was on a class-wide basis, which the Phase I jury determined existed. Individual reliance was not an issue for Phase II, but would be reserved for Phase IV when individual, monetary damages were determined. The court further found that failure to mitigate was not a viable affirmative defense because participation in a cessation program was mitigation in and of itself. Lastly, the court overruled the defendants' exception of prescription finding that the doctrines of contra non valentem and continuing tort applied. At the end of Phase II, the jury returned a special verdict form accepting all of plaintiffs' demands, except for limiting the smoking cessation program to a 10 year period (plaintiffs had requested a 25 year program). Almost six weeks after the jury returned its verdict, the trial court issued a judgment and a separate document entitled "Findings of Fact and Reasons for Judgment." The judgment ordered that the jury's award of $591,342,476.55 plus pre-judgment interest be paid into the court's registry. The judgment did not include the jury's Phase I finding that defendants' product was not defective or that plaintiffs were not entitled to medical monitoring. The trial court explained that it was issuing its own judgment, with detailed reasons, because it considered the jury's verdict to be merely advisory. This appeal followed. DISCUSSION: ASSIGNMENT OF ERROR NO. 8: We address this assignment of error first as it affects our use of the judgments, special verdicts, findings of fact, evidence and rulings considered to address each other assignment of error. Defendants aver that the trial court erred by displacing the jury as finder of fact by refusing to include in the final judgment the jury's rejection of plaintiffs' claim that defendants' product was defective in normal use, and the jury's rejection of plaintiffs' demand for medical monitoring. Further, the trial court erred in making its own factual finding that defendants had assumed duties to protect others when they published the Frank Statement and the Cigarette Advertising Code of 1964, rather than submitting that factual finding to the jury. Lastly, defendants aver that the trial court erred when it rendered the jury's findings "advisory" and issued its own "Findings of Fact and Reasons for Judgment." Following Phase I of the trial, the trial court issued Trial Order No. 10, which stated in part: "The Court therefore determines that a Phase II trial is necessary and that trial shall be conducted in accordance with this Order and tried by the Phase I jury." Weeks after issuing Trial Order No. 10, the trial court issued a per curiam wherein it stated that the Phase II proceedings were equitable or injunctive in nature, thus obviating the need for a jury. However, out of an abundance of caution, the trial court would allow the jury to adjudicate Phase II. Subsequent to the Phase II trial, the trial court issued a judgment acknowledging that the matter had been tried before a jury, but stated that the judgment was based on an adoption of the jury's findings for both Phase I and Phase II, its own findings of fact, equitable considerations, and applicable principles of equity and law. Louisiana Code of Civil Procedure Art. 1812 D provides in the case of a special 1273 verdict, the trial court shall "enter judgment in conformity with the jury's answers to these special questions and according to applicable law." La.Code of Civ. Proc. art.1916 provides that "[w]hen a case has been tried by a jury, the following rules shall apply as to a judgment rendered on the verdict: . . . (2) When the jury returns a special verdict, the judge must sign a judgment in accordance therewith. . . ." There is no provision in Louisiana law for a judge to render written reasons for judgment in a jury trial. Further, there is no provision for a jury's verdict to be considered "advisory," thereby allowing the trial court to interpret the jury's verdict or substitute its own findings of fact. This Court will not, therefore, consider the trial court's findings of fact or reasons for judgment. Further, we will consider the judgment rendered insofar as it tracks the jury's special verdicts. Accordingly, we amend the judgment to include the jury's finding that defendants' product was not defective in design prior to or after September 1, 1988, and that medical monitoring is not reasonably necessary. ASSIGNMENTS OF ERROR NOS. 5 AND 6: We will next address these assignments of error, since they are dispositive of major issues in this case. Defendants argue that the jury's rejection of plaintiffs' claims under the Louisiana Products Liability Act (LPLA), La. R.S. 9:2800.51, et seq., precludes class-wide liability because the LPLA provides the exclusive remedy for persons claiming injury due to product defects. Therefore, any class member who began smoking after the effective date of the LPLA, September 1, 1988 ("post-1988 smokers"), or whose injury (addiction) accrued after that date, should be precluded from pursuing a claim. Plaintiffs counter that because the cigarette industry intentionally exposed them to harmful toxins, with the intention of causing addiction to defendants' products, their claims should be excluded from coverage under the LPLA. Plaintiffs propose that even assuming, arguendo, that a cigarette is not defective because it did exactly what it was engineered and manufactured to do, their claims should not be preempted because "the manner in which their [the defendants'] cigarettes were engineered and marketed resulted in both addiction and an increased risk of harm, which was largely unknown and unknowable to the Plaintiff Class and yet substantially certain by Defendants to occur." Plaintiffs suggest that because their claim is unique, it should be excluded from coverage under the LPLA. Also, plaintiffs argue that because the defendant cigarette manufacturers conspired with the Tobacco Institute, the Tobacco Industry Research Committee and the Council for Tobacco Institute to suppress research, to conceal information and to confuse the issue of smoking and health, the cigarette industry should be considered non-manufacturers, and thereby not shielded by the LPLA. Lastly, plaintiffs argue that the jury's finding that defendants engaged in fraudulent activity in conspiracy with the Tobacco Institute also removes plaintiffs' claims from the realm of the LPLA. They argue that under Louisiana law "fraud vitiates all things." The LPLA provides the exclusive theory of liability available to persons claiming a product defect after September 1, 1988 ("post-1988 smokers"). The statute recognizes four theories of liability. A manufacturer may be held liable if its product is unreasonably dangerous when a claimant's damage arises from a reasonably anticipated use of the product. La. R.S. 9:2800.54. A product is unreasonably dangerous if 1274 and only if the product is unreasonably dangerous: (1) in construction or composition; (2) in design; (3) because an adequate warning has not been provided; or, (4) the product does not conform to an express warranty of the manufacturer. La. R.S. 9:2800.54 B(1-4). The plaintiffs' petition indicates that they sought damages based on a design defect only. In Phase I of the trial, the jury found that the cigarettes being sold by defendants both before and after the effective date of the LPLA were in normal use and were not defective in design. A strict interpretation of the LPLA, therefore, provides that the only theory of liability available to post-1988 smokers, or plaintiffs who began smoking before September 1, 1988 ("pre-1988 smokers") whose injury accrued after September 1, 1988, was rejected by the jury. For all class members subject to the LPLA, the jury's finding was case-dispositive. Other liability theories were unavailable as a matter of law. Fraud claims cannot be used to circumvent the LPLA. See generally Kemp v. Armstrong World Indus., 02-1293, pp. 7-8 (La.App. 1 Cir. 5/28/03), 855 So. 2d 774, 779; Arabie v. R.J. Reynolds Tobacco Co., 96-0978, pp. 2-4 (La.App. 5 Cir. 6/30/97), 698 So. 2d 423, 424-25; Brown v. R.J. Reynolds Tobacco Co., 52 F.3d 524, 526 (5th Cir.1995); Jefferson v. Lead Indus. Ass'n, 930 F. Supp. 241, 245 (E.D.La.1996). Nor is there an LPLA exception for intentional breach of an "assumed duty." See Stahl v. Novartis Pharmaceuticals Corp., 283 F.3d 254, 261-62 (5th Cir.2002). Further, the issue of whether or not the LPLA can be applied retroactively is irrelevant here. It is beyond dispute that the LPLA applies prospectively to all post-1988 smokers, as well as all pre-1988 smokers whose claims accrued on or after the effective date of the Act. La. R.S. 9:2800.52; Kemp v. Armstrong World Indus., 02-1293 (La.App. 1 Cir. 5/28/03), 855 So. 2d 774. Finally, defendants argue that the trial court erred in including a jury interrogatory concerning the relationship between defendants and the Tobacco Institute, the Tobacco Industry Research Committee, and the Council for Tobacco Research (referred to herein collectively as "TI"). TI was an industry trade organization, unlike other defendants, which are cigarette manufacturers. Without a request from plaintiffs, the trial court included a jury interrogatory asking if TI was the alter ego of the defendant manufacturers. Defendants propose that the purpose of this interrogatory was to place all of the defendants outside the scope of the LPLA. In other words, since TI was not a manufacturer under the LPLA, if the jury found that TI was the manufacturers' alter ego, then the manufacturers were also subject to non-LPLA claims as well. According to defendants, the problem with this reasoning is that plaintiffs offered no proof whatsoever to establish that TI was the alter ego of the defendant manufacturers. The alter ego doctrine evolved after the creation of limited liability entities such as corporations came into vogue. The purpose of the doctrine is to allow plaintiffs to "pierce the corporate veil" of a corporation in order to hold individual shareholders liable for wrongdoing. It usually involves situations where fraud or deceit has been practiced by a shareholder acting through the corporation. Riggins v. Dixie Shoring Co., 590 So. 2d 1164, 1168 (La.1991). Another basis for piercing the corporate veil is when the shareholders disregard the requisite corporate formalities to the extent that the shareholders are 1275 no longer distinct from the corporate entity. Id.; Gordon v. Baton Rouge Stores Co., 168 La. 248, 121 So. 2d 759 (1929). There are several non-inclusive factors a court may use to determine whether to apply the alter ego doctrine: 1) commingling of corporate and shareholder funds; 2) failure to follow statutory formalities for incorporating and transacting corporate affairs; 3) undercapitalization; 4) failure to provide separate bank accounts and bookkeeping records; and 5) failure to hold regular shareholder and director meetings. Riggins, supra; Manning v. United Medical Corp. of New Orleans, 04-0035, p. 9 (La.App. 4 Cir. 4/20/05), 902 So. 2d 406, 412-13. We are cognizant that there could be other factors in determining that the corporate veil should be pierced, however, it is also clear that the other factors would also deal with the day-to-day operation of the corporation. None of those factors are present in this case. The record does not contain any evidence whatsoever to reach the conclusion that the TI is the alter ego of the defendant manufacturers. Indeed, that conclusion can only be reached by skewed logic. If TI were the manufacturers' alter ego, TI would also qualify as a manufacturer, and thus be covered under the LPLA. There was no allegation, proof or finding that TI controlled the manufacturers. Additionally, the jury interrogatories concerning fraud and conspiracy only named the defendant manufacturers, not the TI. Thus, there was no jury finding that the TI conspired with the defendant manufacturers to commit fraud. Nor is the award justified under a theory of equitable relief. Plaintiffs aver that where, as here, a unique situation exists that "challenges our traditional legislation and customs," the court should proceed according to equity. But equity cannot alter the elements of a claim, or create a new claim that belongs solely to the class as opposed to its members. Under Article 4 of the Louisiana Civil Code, resorts to equity are barred unless "no rule" governs the case that "can be derived from legislation or custom." This case is governed by the LPLA and Article 2315 of the Louisiana Civil Code. These laws constitute "express law" and thus preclude plaintiffs' attempt to create new forms of liability in "equity." Plaintiffs suggest that Bourgeois v. A.P. Green Indus., Inc., 97-3188 (La.7/8/98), pp. 7-8, 716 So. 2d 355, 360, endorses their attempt, but the Supreme Court made it clear that even a monitoring claim requires the establishment of liability "under traditional tort theories of recovery." Bourgeois, p. 11, 716 So.2d at 362. Moreover, plaintiffs contradict themselves. In their effort to rationalize the award of prejudgment interest (which is clearly unavailable in equity), plaintiffs argue that the "liability" here is not equitable, only the remedy is. Thus, in plaintiffs' view as well, all traditional elements of liability still must be established. In sum, equitable relief in this case has no foundation in Louisiana law, violates due process, and uproots the very concept of adjudication. Therefore, the only available remedies to plaintiffs are express law. As discussed earlier, the LPLA is the exclusive remedy available to post-1988 smokers and pre-1988 smokers, whose injury accrued after that date (collectively, the "excluded plaintiffs"). Since the jury rejected the plaintiffs' claims under the LPLA, this group is not entitled to any award, even smoking cessation treatment. The only remaining group of plaintiffs that is eligible to receive cessation assistance is the pre-1988 smokers, whose claim accrued before 1988 (collectively, the "remaining plaintiffs"). We therefore affirm 1276 the jury's award as it pertains to the pre-1988 smokers and reverse the jury's verdict as it pertains to the excluded plaintiffs, and specifically find that the members of the excluded class are not eligible to receive any type of award. ASSIGNMENT OF ERROR NO. 1: Defendants argue that the trial court violated Louisiana law and due process by holding defendants liable to all class members, where (a) there was no proof or jury finding that all class members were addicted (the alleged classwide injury); (b) plaintiffs' experts conceded that many class members were not addicted; (c) both plaintiffs' experts and the court acknowledged that addiction was an individualized issue and could not be determined on a class-wide basis; and (d) the court failed to elicit the necessary findings of injury in its jury instructions and interrogatories. Phase I of the trial in this matter adjudicated all common issues of liability (fault and causation). After six months of trial, at which numerous fact and expert witnesses testified, and during which thousands of internal tobacco company documents were admitted and read to the jury, the jury found that the defendants, individually and conspiring with each other, knowingly and deliberately conspired to commit, and did commit fraud that spanned five decades, directly causing injury to the class of Louisiana smokers. The jury determined that the defendants knowingly and deliberately addicted the population of Louisiana smokers to a product known by them to be both addictive and extremely toxic. In sum, the jury found that the actions of these defendants increased the risk of harm to the entire class of Louisiana smokers and determined the remedy to be cessation assistance. Defendants claim that the plaintiffs are required to prove that each individual class member is addicted to cigarettes, as a prerequisite to participate in a program. However, the jury determined that the intent and effect of the defendants' conduct was, and is, to encourage addiction, which results in a significantly increased risk of developing serious illness or disease. No class member or other person who is not dependent on cigarettes would consider availing himself of a cessation program. Therefore, as a matter of due process for res judicata purposes, defendants do not need to know precisely who is in the class, nor is it necessary that each and every class member be determined to be clinically addicted to nicotine. The only people who will seek to participate in this program will be those who desire to participate: those who are addicted or dependent upon nicotine. Neither Civil Code art. 4, Civil Code art. 2315, amended Civil Code art. 2315, nor any other authority requires that in order to participate in the cessation program, a plaintiff must prove that he is addicted to something. Furthermore, the central common question concerning the addictive nature of cigarettes as designed and manufactured by the defendants was answered in the affirmative during Phase I of trial. All of the experts agreed that smokers are at a significantly increased risk of harm, and virtually every witness including defendants' own experts testified that cessation treatment should be offered to all smokers who desire to avail themselves of such assistance. The Phase II testimony (specifically that of Dr. David Burns, plaintiff's expert) also confirmed that cessation is recommended for all smokers, whether dependent, addicted, or habituated. In light of these facts, and since smoking cessation is desirable regardless of addiction, we find that addiction is not an issue that must be determined on an individual basis. We find that addiction 1277 and injury were properly proven at trial by the remaining plaintiffs. This assignment of error is without merit. ASSIGNMENT OF ERROR NO. 2: Defendants next assert that the trial court violated Louisiana law and due process by holding defendants liable to all class members, where (a) there was no proof or jury finding that established the reliance element of plaintiffs' fraud claim; (b) there was no proof or jury finding that established the necessary causation and other elements of an "assumed duty" claim; and (c) the court misstated the necessary elements of plaintiffs' fraud and "assumed duty" claims in its jury instructions and interrogatories. Proof of fraud requires causation in the form of reliance. The jury specifically found that there was detrimental reliance on the distorted knowledge concerning smoking and health by a class of Louisiana citizens, that there was detrimental reliance on the distorted knowledge concerning the properties of nicotine, and that such reliance was reasonable. The certified claim is one for a single, court-supervised fund by the class as a whole. Therefore, the only question of reliance pertains to the reliance by the class as a whole. If and when individual class members assert individualized claims for money damages, individual reliance may be at issue at that time. However, individual reliance is not at issue in the instant case. Defendants urge that Banks v. New York Life Ins. Co., 98-0551 (La.7/2/99), 737 So. 2d 1275, is controlling. We find that the instant case is distinguishable from Banks. Banks involved fraud by affirmative misrepresentation; non-uniform representations made by thousands of insurance agents; and fraud accomplished by direct, rather than indirect, channels of communication. The case at bar involves fraud of suppression, concealment, and omission designed to distort the entire body of public knowledge through indirect communications. The Phase I evidence revealed a five decade long public relations effort to create the impression in the public that there was a legitimate controversy about the health effects of smoking, even though defendants knew that such an impression was false. The trial record shows that defendants sought to create doubt about the connection between smoking and disease so that smokers would be able to justify beginning or continuing to smoke. In Falise v. American Tobacco Company, 94 F. Supp. 2d 316 (E.D.N.Y.2000), the court stated: Where . . . the fraudulent scheme is targeted broadly at a large portion of the American public, the requisite showing of reliance is less demanding. Such sophisticated, broad-based fraudulent schemes by their very nature are likely to distort the entire body of public knowledge rather than to individually mislead millions of people . . . [T]o require reliance on specific misrepresentations where indirect challenges on communication were integral to the success of the scheme would produce the perverse result of having the most massive and sinister fraudulent schemes be the ones that must escape . . . liability. Id. at 320. We agree. Where a defendants' lengthy course of prohibited conduct affects a large number of consumers, like the class of Louisiana smokers, and the defendants use indirect communications designed to distort the entire body of public knowledge, the showing of reliance that must be made to prove a causal connection between smoking and the class-wide reliance 1278 on communications from the defendants need not include direct evidence of reliance by individual consumers of defendants' cigarettes. Rather, the causal connection may be established by direct or other circumstantial evidence that a court determines is relevant and probative as to the relationship between the class claim and the prohibited conduct. We find that causation and reliance were adequately proven in this matter, and hold that the jury's finding of detrimental reliance was not error. As such, we deem defendants' second assignment of error to be without merit. ASSIGNMENT OF ERROR NO. 3: Defendants argue that the trial court prevented them from contesting plaintiffs' claims with specific proof relating to the class representatives' knowledge, conduct, and other circumstances, in violation of Louisiana law and due process. Specifically, defendants were not allowed to question the class representatives as to why they began smoking; why they smoked certain brands or types of cigarettes; whether they relied on the alleged misrepresentations; whether they were addicted; why they stopped smoking; and when they had notice of their claims for purposes of prescription. Defendants complain that they were barred from presenting to the jury pre-trial admissions by the two class representatives that they had smoked for reasons unrelated to any alleged misconduct; that they had received warnings about the risks of smoking from doctors, family, and the media; that they were fully aware of the federally-mandated health warnings; and, that they were aware of their alleged injury many years prior to the filing of this lawsuit. After reviewing the jury's findings, we find the trial court's denial of cross-examination to the defendants on the issue of why plaintiffs began smoking was harmless error. The jury specifically found that plaintiffs' had not proven that defendants' products were a substantial factor in causing the class to begin smoking. Rather, the jury found that defendants' products were a substantial cause of plaintiffs continued smoking, based on the jury's additional finding that defendants' products were addictive. These findings were sufficiently supported by expert testimony and are not manifestly erroneous. Regarding the denial of cross-examination as to whether they relied on defendants' misrepresentations, whether they were addicted, or why they stopped smoking[3], we also find that it was harmless error to not allow cross-examination of the class representatives. Plaintiffs urge that the record is replete with evidence that defendants withheld volumes of knowledge from the public concerning the harmful, if not deadly, chemicals that were contained in defendants' products. Our review of the record confirms the presence of extensive record evidence that the defendants consciously withheld information from the public information vitally important to an informed decision to smoke or not. The jury heard this evidence and made a factual finding that defendants' intentionally withheld the information to the detriment of plaintiffs. Therefore, the issue of reliance is irrelevant because the information upon which plaintiffs could rely to make an informed decision was severely lacking due to defendants' misrepresentations. 1279 ASSIGNMENT OF ERROR NO. 4: Defendants also argue that the trial court erred in not allowing them to present any affirmative defenses including prescription, comparative fault, and failure to mitigate. Defendants argue that the trial court improperly nullified the prescription defense by not allowing them to cross-examine the class representatives on the issue. Defendants aver that a finding that contra non valentem and continuing tort defeated the defense of prescription on a class-wide basis was error. The courts created the doctrine of contra non valentem as an extension of the general rules of prescription. The Louisiana Supreme Court and this Court have determined the factual situations to which the doctrine applies so as to prevent the running of liberative prescription: "1) where there was some legal cause which prevented the courts or their officers from taking cognizance of or acting on the plaintiff's action; 2) where there was some condition coupled with a contract or connected with the proceedings which prevented the creditor from suing or acting; 3) where the debtor himself has done some act effectually to prevent the creditor from availing himself of the cause of action; or 4) where the cause of action is neither known nor reasonably knowable by the plaintiff even though the plaintiff's ignorance is not induced by the defendants." Renfroe v. State, ex rel Dep't of Transp. and Dev., 01-1646, p. 9 (La.2/26/02), 809 So. 2d 947, 953; In re: Medical Review Panel of Thomas, 05-0879, 05-0880, p. 3 (La.App. 4 Cir. 5/31/06), 934 So. 2d 188, 189-90. Defendants admit that two of the above situations are arguably applicable to the case at hand. The first situation is where the debtor himself has done some act effectually to prevent the creditor from availing himself of the cause of action, and, the second is where the cause of action is neither known nor reasonably knowable by the plaintiff even though the plaintiff's ignorance is not induced by the defendants. However, defendants argue that there is nothing in the record to establish that they "effectually" prevented the plaintiffs from suing earlier, or that plaintiffs lacked sufficient knowledge to sue earlier. Plaintiffs urge that the defendants did prevent them from timely filing suit because they were not aware of certain information withheld from the general public through defendants' fraud, conspiracy and intentional concealment. We do not find plaintiffs' argument persuasive. Although the jury found and the record supports that defendants engaged in fraudulent behavior in concealing the extent of the addictive nature of their products, the record also contains evidence of the warnings placed on cigarette packages to alert plaintiffs to the possible consequences of continued smoking. Thus, we do not find that the doctrine of contra non valentem is applicable to the facts of this case. The second basis upon which the trial court relied for denying defendants' exception of prescription is that the defendants' actions constituted a continuing tort, a jurisprudentially recognized doctrine that is an exception to the general rules of prescription. The trial court based its ruling on the jury's determination that the defendants intentionally promoted dependence upon nicotine from at least December 1953 through at least May 24, 1996, and that the defendants engaged in a fraudulent conspiracy to suppress information and distort the truth from at least January 1954, through May 24, 1996. 1280 The continuing tort doctrine only applies when continuous conduct causes continuing damages. Risin v. D.N.C. Investments, L.L.C., 05-0415, p. 4 (La.App. 4 Cir. 12/7/05), 921 So. 2d 133, 136, citing Bustamento v. Tucker, 607 So. 2d 532, 542 (La.1992). Where the cause of injury is a continuous one giving rise to successive damages, prescription does not begin to run until the conduct causing the damage is abated. Risin, supra, citing South Central Bell Telephone Co. v. Texaco, Inc., 418 So. 2d 531, 533 (La.1982). The Bustamento court found that the doctrine applied in that case because the acts or conduct were continuous, were perpetrated by the same actor, were of the same nature, and the conduct became tortious by virtue of its continuous, cumulative, and synergistic nature. Bustamento, 607 So.2d at 542. Defendants argue that once the class representatives learned of their alleged addiction, prescription began to run as to their claims. Plaintiffs again argue that the jury's finding that defendants engaged in a fraudulent conspiracy to suppress information and distort the truth through at least the date suit was filed supports a finding that the doctrine of continuing tort is applicable. We agree with the plaintiffs. In Wilson v. Hartzman, 373 So. 2d 204 (La. App. 4 Cir.1979), this Court explained: [T]he continuing and repeated wrongful acts are to be regarded as a single wrong which gives rise to and is cognizable in a single action, rather than a series of successive actions. Therefore, the date for commencing the accrual of prescription of an action based on the single wrong is the date of the last wrongful exposure, and the single action may be filed within the prescriptive period reckoning from the cessation of the continuing wrongful acts. Id. at 207 (citations omitted). The Court also recognized the distinction between the discovery rule and the continuing tort doctrine: . . . while prescription as a general rule begins to run from the date of commission of the tort, in those cases in which the damages are not immediately apparent, it has often been held that prescription begins to run from the time a reasonable person under similar circumstances would have become aware of both the tort and the damages. See Stone, Louisiana Civil Law Treatise Tort Doctrine § 120 (1977). Another exception to commencement of prescription on the date of the tort is the situation in which the tortious conduct that is the operating cause of the damages is a continuing act, giving rise to successive damages from day to day. In such a case prescription does not commence to run until the continuing cause of the damages is abated. Id. at 206. Moreover, the Louisiana Fifth Circuit explained in Coulon v. Witco Corp., 03-208 (La.App. 5 Cir. 5/28/03), 848 So. 2d 135, 138, that the continuous tort doctrine does not encompass the plaintiff's knowledge in order to decide when prescription will begin to run. We agree with the trial court that defendants' tortious conduct was continuous. The jury's findings that defendants' intentionally withheld information from the general public as to the addictive nature of their products at least through the date this suit was filed constitutes a continuing tort. Thus, the trial court properly denied defendants' exception of prescription. Defendants also argue that the trial court erred in improperly nullifying their defense of comparative fault because such a defense is inherently individualized. 1281 The trial court stated in the November 4, 2003 per curiam that comparative fault does not apply to this case because the record confirms the plaintiffs' assertions that the defendants intentionally addicted the class "with substantial certainty that the class . . . would be seriously harmed and that thousands of Louisiana citizens would be subjected to an increased risk of contracting serious latent diseases that lead to death." The court relied on La. Civ.Code art. 2323 C in support of its position. Article 2323 C provides, in part: ". . . if a person suffers injury, death or loss as a result partly of his own negligence and partly as a result of the fault of an intentional tortfeasor, his claim for recovery of damages shall not be reduced."[4] The trial court further reasoned that comparative fault should not apply to the class because the jury found that the plaintiffs used defendants' products precisely as intended. Defendants argue that the trial court ignored recent jurisprudence interpreting La. Civ.Code art. 2323. In Landry v. Bellanger, 02-1443 (La.5/20/03), 851 So. 2d 943, the Supreme Court examined in detail the legislative intent of the addition of Section C to Article 2323. The Court deduced that the "article clearly requires that the fault of every person responsible for a plaintiff's injuries be compared regardless of the legal theory of liability asserted against each person." Landry, 851 So.2d at 952, citing Dumas v. State, 02-0563 (La.10/15/02), 828 So. 2d 530. The Court further noted "the fact that the plaintiff may have been aware of the risk created by the defendant's conduct should not operate as a total bar to recovery. Instead, comparative fault principles should apply, and the victim's `awareness of the danger' is among the factors to be considered in assessing the percentages of fault." Id. at 02-1443, p. 13, 851 So. 2d 953, citing Murray v. Ramada Inns, Inc., 521 So. 2d 1123, 1134 (La.1988). Although the facts of the Landry case are vastly different (the litigation evolved from damages sustained in a bar room fight), and the Court was primarily addressing the application of the "aggressor doctrine," it is clear that the same principles apply to the facts of this case. The interpretive rule enunciated in Landry is: It is appropriate to consider the party's respective fault when a matter involves intentional tortfeasors. In prohibiting the reduction of a negligent plaintiff's damages, Article 2323(C) reflects a legislative determination that on the continuum of moral culpability, the act of an intentional actor should not benefit from a reduction in the damages inflicted on a less culpable negligent actor. In the face of the silence of La. C.C. art. 2323(C) regarding how to address the comparative fault of two intentional actors, we can extrapolate from paragraphs A and B of La. C.C. art. 2323 that the fault of the intentional actors can be compared. . . . Therefore, . . . Section C applies only when plaintiff's contributory fault consists of negligence and does not apply where the plaintiff's fault is intentional. Id. at 954. The trial court reasoned that because of defendants' fraudulent and conspiratorial behavior, i.e., denying the addictive nature of its products, plaintiffs could not have consented to becoming addicted, and were thus without fault. The record, however, supports that the jury found defendants' 1282 were not responsible for plaintiffs' decision to begin smoking, a decision that can be interpreted as an intentional act. However, the jury also found that defendants were responsible for plaintiffs continuing to smoke because of the addictive nature of defendants' products. Thus, plaintiffs' continued smoking can not be interpreted as intentional behavior. Thus, the Landry ruling addressing the comparative fault of two intentional tortfeasors is not applicable to this case. Rather, the previous rule enunciated in Veazey v. Elmwood Plantation Associates, Ltd., 93-2818 (La.11/30/94), 650 So. 2d 712, 719, and confirmed by the Landry court is applicable, i.e., Section C of La. Civ.Code art. 2323 is applicable only when a plaintiff's fault is negligent compared to a defendant's intentional fault. Accordingly, we do not find the trial court erred in not allowing defendants' to present the defense of comparative fault. Lastly, defendants urge that the trial court improperly nullified their failure to mitigate defense. They argue that the trial court's pronouncement that "participation in a cessation program is mitigation in and of itself," ignores the definition of mitigation: steps a plaintiff could have taken before filing suit that would have avoided or reduced the costs he or she now seeks. Defendants contend that plaintiffs could have mitigated their damages by quitting without cessation assistance before filing suit. This argument ignores the jury's finding that defendants caused plaintiffs' injury, and the finding that defendants' fraudulent and conspiratorial denial that their products were addictive and/or contained significant levels of substances proven hazardous to human health caused plaintiffs' inability to quit smoking, made it more difficult for plaintiffs to quit smoking, or made it likely that a plaintiff would begin smoking again after quitting. We agree with the trial court that only those plaintiffs who desire to quit smoking will apply for participation in the cessation program. Thus, whatever steps a plaintiff did or did not take to stop smoking prior to filing suit is irrelevant to the facts of this case. ASSIGNMENT OF ERROR NO. 7: Defendants claim that the trial court violated Louisiana law and due process by awarding smoking cessation treatment to all class members where a) plaintiffs' experts conceded that such treatment was medically unnecessary for large segments of the class, and b) the court confused smoking cessation with medical monitoring under factors enunciated in Bourgeois v. A.P. Green Indus., Inc., 97-3188 (La.7/8/98), 716 So. 2d 355, and applied to smoking cessation a garbled set of Bourgeois factors in its jury instructions and interrogatories. Bourgeois, supra, involved plaintiffs, current and past employees of Avondale Shipyards, who allegedly were exposed to asbestos-containing products. Plaintiffs claimed that because of the exposure, they were in need of regular medical examinations to facilitate the early detection and treatment of possible latent diseases. Plaintiffs sought the establishment of a judicially administered fund to cover the cost of periodic monitoring. The Supreme Court recognized that the reasonable cost of medical monitoring is a compensable item of damage under La. Civ.Code art. 2315. Id. at 97-3188, p. 11, 716 So.2d at 360. However, to recover such costs a plaintiff must satisfy certain criteria, with proof being offered via competent expert testimony: 1) significant exposure to a proven hazardous substance; 2) as a proximate result of this 1283 exposure, plaintiff suffers a significantly increased risk of contracting a serious latent disease; 3) plaintiff's risk of contracting a serious latent disease is greater than (a) the risk of contracting the same disease had he or she not been exposed and (b) the chances of members of the public at large of developing the disease; 4) a monitoring procedure exists that makes the early detection of the disease possible; 5) the monitoring procedure has been prescribed by a qualified physician and is reasonably necessary according to contemporary scientific principles; 6) the prescribed monitoring regime is different from that normally recommended in the absence of exposure; and, 7) there is some demonstrated clinical value in the early detection and diagnosis of the disease. Id. at 97-3188, pp. 10-11, 716 So.2d at 360-61. Defendants argue that the Bourgeois court recognized medical monitoring, not a cessation program, as a compensable item of damage. The jury rejected medical monitoring as reasonably necessary. Thus, it was error for the trial court to apply the Bourgeois factors to a claim for a cessation program. Plaintiffs counter that the same policy considerations that caused the Supreme Court to craft a limited, court-supervised remedy in the medical monitoring context are also present with respect to a classwide claim for the establishment of a court-supervised fund for a cessation program. After an examination of the criteria established by the Supreme Court in Bourgeois, we agree with plaintiffs. Factor One: Significant exposure to a proven hazardous substance. The record fully supports the fact that plaintiffs suffered significant exposure to hazardous substances. We recognize that unlike the Avondale workers, plaintiffs voluntarily began smoking and thus subjected themselves to the toxins, and that the jury did not find defendants liable for causing plaintiffs to begin smoking. However, the jury did find that defendants were liable for plaintiffs' continued smoking, inability to quit or difficulty in quitting, or relapses all factors linked to the addictive nature of nicotine. Factor Two: As a proximate result of this exposure, plaintiff suffers a significantly increased risk of contracting a serious latent disease. Again, the record supports the fact that smokers have an increased risk of developing serious, life-threatening diseases. The record also supports the fact that quitting smoking, even after years of doing so, can increase a smoker's chance of not contracting serious latent diseases. Factor Three: Plaintiff's risk of contracting a serious latent disease is greater than (a) the risk of contracting the same disease had he or she not been exposed and (b) the chances of members of the public at large of developing the disease. The Supreme Court explained that this factor serves to ensure that the plaintiffs have a need for medical monitoring as a result of exposure. Further, it serves to ensure that exposures suffered by the public at large, which increase the entire populations' risk of disease, do not form the basis of the claims. Bourgeois, 97-3188, pp. 9-10, 716 So.2d at 361. The record supports the fact that smokers' risk of contracting certain diseases, particularly those manifesting in the lungs, is greater than the chance of a member of the general public contracting the same disease. The need to quit smoking is fully supported by the record evidence. Factor Four: A monitoring procedure exists that makes the early detection of the disease possible. 1284 The jury found that plaintiffs did not prove that a medical monitoring procedure was reasonably necessary. It also found that a medical monitoring procedure was no different than normal detection procedures in the absence of exposure to cigarettes. We can only surmise that the jury reasoned that routine annual check-ups could provide the same benefits, and that the defendants should not be made to pay for such examinations. However, the jury did find that there was clinical value in providing cessation programs and that it was proven such programs existed and were reasonably necessary. As noted above, the record supports the fact that quitting smoking, even after years of doing so, can increase a smoker's chance of not contracting serious latent diseases. Factor Five: The monitoring procedure has been prescribed by a qualified physician and is reasonably necessary according to contemporary scientific principles. See Factor Four. Factor Six: The prescribed monitoring regime is different from that normally recommended in the absence of exposure. As noted under Factor Four, the jury did not find it medically necessary to award a medical monitoring program, perhaps because it believed monitoring could be achieved in the course of regular physical examinations. However, clearly there is no need for the establishment of a cessation program in the absence of exposure to nicotine and other toxins contained in cigarettes. The jury found that plaintiffs became addicted to cigarettes because of the toxins contained in defendants' products, and that defendants should therefore pay the cost of helping them to quit. Factor Seven: There is some demonstrated clinical value in the early detection and diagnosis of the disease. The Court also explained in Bourgeois that to fully establish medical monitoring expenses as a cognizable damage under La. Civ.Code art. 2315, plaintiffs must show that there is some medical benefit to be gained through early detection. Id. at p. 11, 716 So.2d at 361. Although a cessation program will not serve to detect a latent disease at its earliest stage, as stated above, the record contains evidence that quitting smoking can lessen a person's chances of contracting a life-threatening disease. Accordingly, we find no error in the trial court's adaptation of the Bourgeois factors for purpose of formulating jury instructions and interrogatories. ASSIGNMENT OF ERROR NO. 9: Defendants argue that the trial and other post-certification developments demonstrated that the class must be decertified. According to the defendants, the trial demonstrated that common issues failed to predominate over individualized issues. Further, defendants argue that the trial confirmed that trying this case as a class action was neither "manageable" nor "superior" to other methods of adjudication. Finally, defendants claim that the class must be decertified because the improper class definition and inadequate class notice preclude any legally binding judgment. Plaintiffs initially sought certification of a broad class action, including claims for personal injuries, general damages, and special damages to be paid directly to the class members. The trial court certified a much more limited class action that sought the establishment of a court-supervised medical monitoring and/or smoking cessation fund. This Court affirmed the class certification, and the Louisiana Supreme Court denied writs. Scott v. American 1285 Tobacco Co., 98-0452 (La.App. 4 Cir. 11/4/98), 725 So. 2d 10, writ denied, 98-3016 (La.2/26/99), 731 So. 2d 189. After trial, the jury determined that the plaintiffs were entitled to a cessation program only. As discussed above, this Court has limited the class even further by excluding a large group of plaintiffs. Only the remaining plaintiffs are eligible to seek cessation assistance. We find that this class definition, as amended by this Court, is proper. The principal fallacy in the defendants' position is the failure to recognize the important distinction between a common unitary claim by a class as a whole for the establishment of a single unitary fund or program, and the aggregated actions of several different, distinct claims of individuals for individualized damage awards. Pursuant to the jury's verdict, no specific judgment or allocation for cessation benefits to any individual class member was made. The only claim that any of the remaining plaintiffs have is the right to apply for participation in a cessation program from the established fund. Phase II of the trial answered the questions of how many class members were addicted, dependent, or had otherwise suffered an injury; how many of those class members would benefit from one or more smoking cessation methods; and how many would likely avail themselves of those methods. This Court has pared down that group further. The administration of the court-supervised and court-directed trust fund will then determine eligibility to participate. None of the cases cited by defendants (including Ford v. Murphy Oil U.S.A. Inc., 96-2913, 96-2917, 96-2929 (La.9/9/97), 703 So. 2d 542, Banks, and Spitzfaden v. Dow Corning Corp., 98-1612 (La.App. 4 Cir. 12/4/02), 833 So. 2d 512) hold that there must be an individualized series of jury trials to determine whether each class member is eligible to participate in a court-supervised cessation program. To the contrary, courts that have addressed the issues in other jurisdictions have held that such "individualized" eligibility determinations should be made administratively, not by a jury. See Petito v. A.H. Robins Co., 750 So. 2d 103, 107 (Fl.Dist.Ct. App.1999); Day v. NLO, 851 F. Supp. 869, 885-87 (S.D.Oh.1994). This Court has already distinguished Ford, a proposed class action involving the claims of residents living in the vicinity of four petrochemical plants for "varying individual damages." Scott v. American Tobacco Co., 98-0452, pp. 4-7 (La.App. 4 Cir. 11/4/98), 725 So. 2d 10, 12-14. Banks implicates individual causation issues because it addresses proposed certification of individual damage claims and is thus inapplicable. Nor does Spitzfaden apply here. Spitzfaden was certified for personal injury damages, and the trial plan did not call for any causation finding in Phase I. Here, Phase I included the common issues of fault and causation. In re Tobacco II Cases, D046435 (Cal.4th App. Dist., Div.1, 9/5/06), 47 Cal. Rptr. 3d 917, recently addressed the certification of a class action for mass tobacco litigation. However, this case too is distinguishable from the instant matter. The plaintiffs in Tobacco II, unlike the plaintiffs in Scott, sought individual awards of money damages each class member in Tobacco II was making an individual claim for restitution of the cost of his or her cigarette purchases. In contrast, plaintiffs here are seeking a single court-supervised fund for the payment of class-wide cessation costs. Defendants also aver that individual notice to potential plaintiffs should have been issued, instead of publication notice only. However, defendants cite no authority 1286 for the proposition that individual notice must be given. In light of the large number of potential plaintiffs, individual notice would be unduly burdensome. Publication notice is adequate and sufficient in this matter. In the instant case, the individualized claims of class members for damages have been reserved, and will have to be litigated in the future. They are not before us today. It was appropriate for the Scott class to establish class-wide causation and "reliance" with respect to an element of damages (a single court-supervised cessation program) common to the class as a whole. This common issue predominates; thus, a class action is the superior vehicle for adjudicating these claims. This assignment of error lacks merit. ASSIGNMENT OF ERROR NO. 10: Defendants next aver that the trial court erroneously entered a judgment based on claims that were barred in whole or in part by federal preemption and the First Amendment. Through rulings on evidence, argument, and jury instructions, the court allowed plaintiffs to assert liability and seek relief based on allegations that (a) defendants failed to disclose health-related information beyond the federally-required warning labels carried by all cigarette packages and advertising; (b) defendants' advertising "neutralized" the federally-required warnings, associated smoking with attractive images and activities, and potentially appealed to youth; (c) defendants' use of terms such as "low tar" and "lights" in advertising and on packages was false and misleading; or (d) defendants engaged in commercial speech, governmental lobbying, and advocacy before governmental agencies. Further, the judgment is based on a jury award that incorporated plaintiffs' request for the funding of court-supervised public relations and advertising, which effectively constitutes government-compelled speech. Article VI of the Constitution provides that it and the laws of the United States "shall be the supreme Law of the Land; any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." Art. VI, cl. 2. Thus, since M'Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 427, 4 L. Ed. 579 (1819), it has been settled that state law that conflicts with federal law is "without effect." Maryland v. Louisiana, 451 U.S. 725, 746, 101 S. Ct. 2114, 2128, 68 L. Ed. 2d 576 (1981). Consideration of issues arising under the Supremacy Clause "start[s] with the assumption that the historic police powers of the States [are] not to be superseded by . . . Federal Act unless that [is]the clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S. Ct. 1146, 1152, 91 L. Ed. 1447 (1947). Accordingly, "`[t]he purpose of Congress is the ultimate touchstone'" of pre-emption analysis. Malone v. White Motor Corp., 435 U.S. 497, 504, 98 S. Ct. 1185, 1189, 55 L. Ed. 2d 443 (1978) (quoting Retail Clerks v. Schermerhorn, 375 U.S. 96, 103, 84 S. Ct. 219, 222, 11 L. Ed. 2d 179 (1963)). Congress's intent may be "explicitly stated in the statute's language or implicitly contained in its structure and purpose." Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S. Ct. 1305, 1309, 51 L. Ed. 2d 604 (1977). In the absence of an express congressional command, state law is pre-empted if that law actually conflicts with federal law, see Pacific Gas & Elec. Co. v. State Energy Resources Conservation and Development Comm'n, 461 U.S. 190, 204, 103 S. Ct. 1713, 1722, 75 L. Ed. 2d 752 (1983), or if federal law so thoroughly occupies a legislative field "`as to make reasonable the inference that Congress left no room for the States to supplement it.'" 1287 Fidelity Fed. Sav. & Loan Assn. v. de la Cuesta, 458 U.S. 141, 153, 102 S. Ct. 3014, 3022, 73 L. Ed. 2d 664 (1982) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S., at 230, 67 S.Ct., at 1152). In Cipollone v. Liggett Group, 505 U.S. 504, 518, 112 S. Ct. 2608, 2618, 120 L. Ed. 2d 407 (1992), the United States Supreme Court outlined the scope of preemption under the Federal Cigarette Labeling and Advertising Act where, as here, injured and/or defrauded smokers bring a lawsuit for damages against a cigarette manufacturer. Under Cipollone, the following claims are not preempted: claims based on pre-1969 conduct; claims for the breach of a voluntarily assumed or self-imposed duty or standard, such as the breach of an express warranty made about the product; intentional fraud and misrepresentation through the concealment of material facts through channels of communication other than traditional advertising and promotion; intentional fraud and misrepresentation by affirmative false statements of material fact in advertising and promotion; and/or claims arising from a conspiracy among the defendants to conceal or misrepresent material facts concerning the health risks of smoking. Cipollone, 505 U.S. at 528-30, 112 S.Ct. at 2623-2625. In the case at bar, the jury found, among other things, that defendants intentionally engaged in actions designed to distort the body of public knowledge concerning smoking and health, and that such fraud contributed to the need for cessation of smoking programs. The jury also found that defendants were engaged in a conspiracy to distort the body of public knowledge concerning smoking and the properties of nicotine. As such, under Cipollone, these claims are not barred by federal pre-emption. The advertisements called for in the jury verdict are not requirements imposed upon defendants by the state, but rather, the independent activities of a court-supervised fund. Defendants' contention that they violate the First Amendment has no merit. ASSIGNMENT OF ERROR NO. 11: In their final assignment of error, defendants argue that the damages award is riddled with mistakes. First, defendants assert that the jury awarded over $312 million for "program components" that were not legally recoverable. In Phase II, plaintiffs presented their proposed 25-year cessation program in a spreadsheet that listed twelve components and cost estimates for each, totaling $1.182 billion. The jury accepted all of plaintiffs' components and cost estimates, except that it reduced the overall duration of the program from twenty-five years to ten years, resulting in an award of more than $591 million. Columns one through four (labeled respectively "Reimbursement of medications," "Telephone quitlines," "Health systems interventions," and "Intensive cessation programs") presented cost estimates for traditional cessation aids such as nicotine gum, patches, and telephone counseling. The remaining eight of the twelve cost components, accounting for more than $312 million, constitute demands for the creation of a statewide ministry of health, including "infrastructure," "centers of excellence," a multi-tentacled bureaucracy, and marketing campaigns. Defendants aver that these components are not legally recoverable. Column Five: Developing cessation capacity. Dr. David Burns, plaintiff's expert, testified that column five provided funds for programs in unspecified localities at "a local hospital, a local health clinic, maybe even a local pharmacy," and to 1288 "start the healthcare systems, building tracking systems, finding ways to put smoking cessation into a comprehensive healthcare context." He allocated $6.5 million annually for the first three years, diminishing thereafter to $2.5 million for the eighth and final year, but his numbers lacked support in any other programs or studies. The award incorporated all of Dr. Burns's suggested funding for the first five years, for a total amount of $29.5 million. Column Six: Community cessation programs. Dr. Burns testified that column six included grants to "communities, that is, churches and other groups that would be interested in providing" cessation services. Such grants might be appropriate benefactions by a legislature or philanthropy, but they cannot constitute an appropriate award by a court. Dr. Burns allocated $1 million annually for this component. There was no basis or support for this amount. The jury awarded a total of $10 million in this category. Column Seven: Marketing and education. Column seven included funds for advertising and promotion to "recruit" participants and "to increase demand." The $13,056,000 annual allocation had no basis in other cessation programs or studies. Confirming that this amount was sheer conjecture, Dr. Burns suggested that someone else would have to figure out how to spend it. The total amount awarded by the jury was approximately $130 million. Column Eight: Evaluation of program effectiveness. Dr. Burns suggested an allocation of $6,212,000 annually for "research projects" and "research centers" (in addition to the "local centers of excellence" proposed in column nine), but with no budget as to "who is going to get this money." A total of $62,120,000 was awarded for this category. Column Nine: Local centers of cessation excellence. Dr. Burns here proposed eight "centers of excellence" to be erected at unknown locations around the state. Plaintiffs variously described these facilities as developing "standards," training "people in the field," "upgrad[ing] skills," "enhanc[ing] the quality of services," and treating smokers who are "schizophrenic" or "depressed." Dr. Burns allocated $4 million annually but again admitted that he had no specific budget for any aspect of this category. The jury awarded $40 million for this component. Column Ten: Development of program standards. Dr. Burns testified that column ten provided for a committee to develop standards, but he knew nothing about the prospective size of the committee, its membership, or its actual costs. He allocated $500,000 annually for this section, and there was a total of $5 million awarded by the jury. Column Eleven: Monitoring and auditing. Dr. Burns testified that column eleven would ensure that "funds are spent for optimal service and only for those people who are entitled to them." However, we find that his allocation was nothing more than an estimate with no factual foundation. He suggested amounts beginning with $700,233 the first year, and diminishing thereafter. A total of $5,019,671 was awarded in this category. Column Twelve: Training and technical assistance. Column twelve suggests an allocation of $12 million annually "to train doctors and their office staff." There was no factual basis for this award; Dr. Burns did not know how many doctors and staff were already present in Louisiana, or how many would need training. A total award of $30 million total was given for this column. We find that the remedy in this case was limited to the medically necessary costs of cessation treatment. Plaintiffs 1289 had no basis for seeking anything beyond such costs. The amounts awarded in columns five through twelve are speculative, unsubstantiated, and unrelated to the actual treatment of nicotine addiction. The cost estimates suggested by Dr. Burns were not based upon utilization rates, class size, or any other facts. As such, we deem these awards not legally recoverable, and reverse the jury's verdict as it pertains to columns five through twelve. Defendants next contend that the award was barred by release and res judicata. Plaintiffs sought, and obtained, a comprehensive, statewide cessation program, effectively open to any Louisiana smoker who might want to participate. According to defendants, plaintiffs' request for such public and open-ended relief duplicated claims already asserted and resolved by the State of Louisiana in its prior suit against the same defendants on behalf of all Louisiana smokers. The resolution of the State's claims barred plaintiffs' claims here under the doctrines of release and res judicata, defendants reason. The Master Settlement Agreement ("MSA") included a list of forty lawsuits throughout the United States that were identified as "released claims." This list did not include the instant case, which had been certified as a class action nineteen months earlier. Further, the Releasing Parties under the MSA do not include private citizens, such as Ms. Scott and Ms. Jackson, nor purport to settle claims of the State as parens patriae for private redress. This argument has no merit. Defendants also argue that the court erroneously expanded the class definition and thus the potential cost of any cessation program. The class definition included Louisiana residents who "desire to participate in a [cessation or monitoring] program." The class notice stated: "If you do not want to participate in a program designed to assist you in cessation of smoking . . . you are not a member of this class." At the close of evidence, the court gave a jury instruction that expanded class membership to include smokers who had no pre-existing "desire to participate" but who might form such a desire at any future time for "the duration of the program," which the jury later determined to be ten years. This instruction increased the number of potential participants tenfold, according to defendants. We disagree. The instruction did not expand the class definition. Rather, the only people who will be affected by the verdict are those people who, at any point in time, might wish to avail themselves of the benefits of such a program. The class members were provided with notice and given the opportunity to opt out of the class. For those class members who did not opt out, the practical effect of the verdict is the same: Anyone who at any time might have desired, or may yet desire, to participate, is bound by the judgment in this case. This ruling was not erroneous. Next, defendants claim that the court committed further legal error by failing to instruct the jury to reduce any award to present value, as most of the costs of a cessation program would be incurred in the future. Defendants had a full opportunity to have their own economics expert testify about present value, but did not do so. Defendants' expert did not offer a present value calculation. We find no error in this ruling. Defendants further argue that the trial court erred by awarding prejudgment interest. Louisiana Revised Statute 13:4203 provides "[l]egal interest shall attach from 1290 date of judicial demand, on all judgments, sounding in damages, `ex delicto', which may be rendered by any of the courts." The term ex delicto is Latin for "from a wrong" or "from a transgression," and is used in law to indicate the consequences of a tort. Awarding legal interest on a judgment was designed to compensate a plaintiff for his loss of the use of money to which he is entitled, the use of which the defendant had while the litigation progressed. Trentacosta v. Beck, 95-0096 (La.App. 4 Cir. 2/25/98), 714 So. 2d 721. Defendants argue that the award in this case is unique in that it does not award money damages to plaintiffs. Plaintiffs counter that it does not matter how the award is crafted because the cause of action arises in tort pursuant to La. Civ.Code art. 2315. We agree with defendants that an award of the creation of a smoking cessation program does not qualify for pre-judgment interest as intended by La. R.S. 13:4203. While it can be argued that there was the potential for a monetary judgment to each plaintiff, in actuality, no money is being awarded individually. Indeed, following a hearing on plaintiffs' motion to exclude evidence of comparative fault, the trial court issued reasons for judgment in which it explained that plaintiffs' claim for the establishment of a medical monitoring and/or cessation program is not an action for "damages" as defined in Bourgeois v. A.P. Green Indus., Inc., 97-3188 (La.7/8/98), 716 So. 2d 355. See Scott v. American Tobacco Co., Inc., 2002-2449, 2002-2452 (La.11/15/02), 830 So. 2d 294, 296. Thus, it cannot be argued that plaintiffs were deprived of the use of money while this litigation was pending. The jury award fully funded a smoking cessation program in which all qualified plaintiffs may participate. Pre-judgment interest in this context would not serve the intended purpose of La. R.S. 13:4203. Finally, defendants assert that the trial court erred by failing to provide for an allocation of fault among defendants. In Phase I of the trial, the jury found that there was a conspiracy among all of the named defendants. As to the class of plaintiffs, the defendants are solidarily liable pursuant to Louisiana Civil Code art. 2324(A). As such, further allocation of fault was unnecessary. The trial court did not err. CONCLUSION: Accordingly, for the foregoing reasons, the trial court's judgment is affirmed in part, amended in part and reversed in part. We remand this matter for further proceedings. AFFIRMED IN PART; AMENDED IN PART; REVERSED IN PART; REMANDED CANNIZZARO, J., concurs in the result with reasons. BELSOME, J., dissents in part and assigns reasons. CANNIZZARO, J., concurring in the result with reasons. I write separately to clarify my understanding of the results reached by the majority. The appellants were ordered by the trial court judge to fund a smoking cessation program for certain members of the plaintiff class who desire to participate in such a program for the purpose of overcoming nicotine addictions that were acquired by using tobacco products manufactured or promoted by the appellants. The plaintiff class included all Louisiana residents who used tobacco products on or before May 24, 1996. The class pursued their claims based on a number of theories, 1291 including fraud, the breach of an assumed duty, and products liability. The majority finds that the class members who began using or became addicted to tobacco products after September 1, 1988, the effective date of the Louisiana Products Liability Act, La. R.S. 9:2800.51 et. seq. (the "Act"), should be treated differently from those who began smoking and became addicted to tobacco products before the effective date of the Act. The majority finds that the class members who began smoking and became addicted prior to the effective date of the Act (the "Pre-1988 Smokers") proved that the appellants owed certain duties to the pre-1988 Smokers and that those duties were breached. Thus, the majority finds that the Pre-1988 Smokers were entitled to damages. I agree with this result. The majority also finds that the class members who began using or became addicted to tobacco products after the effective date of the Act (the "Post-1988 Smokers") are not entitled to any recovery. The majority bases this result on the exclusivity provision of the Act, which states that "[t]his Chapter [La. R.S. 9:2800.51 et. seq.] establishes the exclusive theories of liability for manufacturers for damage caused by their products," and on the jury finding that the tobacco products manufactured and promoted by the appellants were not defective products. Because the Act provided the exclusive remedy for the Post-1988 Smokers, I agree with this result reached by the majority. I also concur with the majority's resolution of the issue of damages. I agree that damages should be awarded for the reimbursement of medications, for the funding of telephone quit lines, and for the providing of health system interventions and intensive cessation programs but not for the remaining items of damages awarded by the trial court. I further agree with the majority that the award is not the type of award to which prejudgment interest applies. Additionally, I agree with the majority's affirmation of the trial court's determination that ten years should be the time period during which the damages should be made available to the Pre-1988 Smokers. Based on my understanding of the majority opinion, I concur in the following results: 1. The Post-1988 Smokers are not entitled to any award. 2. The Pre-1988 Smokers are entitled to an award of the following items to the extent that they may assist them in overcoming their addictions to tobacco products: reimbursement for medications, health interventions, telephone counseling, and traditional smoking cessation aids, such as nicotine patches and nicotine chewing gum. 3. The Pre-1988 Smokers are not entitled to an award for any of the remaining items for which damages were claimed. 4. The smoking cessation program, which will consist of the items of damages listed in paragraph 2, will last for ten years. 5. The case will be remanded to the trial court to reduce the amount of the damages to cover the Pre-1988 Smokers only, because the members of the plaintiff class who are entitled to recover include only those smokers and do not include the Post-1988 Smokers. 6. The trial court will render a revised judgment consistent with the majority opinion. BELSOME, J., dissenting in part and assigning reasons. I respectfully join in with the majority's findings regarding the damages awarded to the pre-1988 smokers and the conclusion that the award is not the type *1292 to which pre-judgment interest applies. Additionally, I concur in the affirmation of the trial court's decision that 10 years should be the duration of the cessation program. I depart from the majority's opinion on one issue; the post-1988 smokers should remain in the class. While the majority correctly finds the LPLA provides the exclusive theory of liability against a manufacturer after September 1, 1988, I disagree with the ultimate conclusion. At issue is whether a product designed for human consumption is not defective within its design even though it requires the creation of a cessation program for its users. Why would a product free from defect necessitate a cessation program for its users? That declaration by the jury combined with the responses given in other jury interrogatories, namely that the defendant engaged in fraud and designed a product that was intended to cause its users to become addicted, clearly suggests that such a product is defective per se. It is inconceivable for a product intended for human ingestion to not be defective in design, even though it significantly increases the risk of contracting diseases such as lung cancer, bladder cancer, chronic obstructive pulmonary disease and cardiovascular disease. That conclusion simply defies all logic. How can the court reconcile those findings with the conclusion that the product was not defective in design? Arguably, because the cigarette manufacturers accomplished their objective in designing a product that would cause the public to become addicted to harmful substances, the manufacturers are able to escape liability under the LPLA. That reasoning produces an illogical and unjust result. The post-1988 smokers are being exposed to the same substances that the jury found to be hazardous to human health and are facing an increased risk of disease, yet, they will be excluded from receiving help to overcome their addiction because the jury, apparently using a very literal interpretation of "defective in design", found the product did what it was intended to do. In the confines of the LPLA "unreasonably dangerous" is synonymous with "defective". Thus, the jury's determination that the product was not defective in design is inconsistent with its other findings, as well as the evidence in the record and therefore, manifestly erroneous. Accordingly, I would reverse and render on that issue. NOTES [1] Defendants-appellants are: Brown & Williamson Tobacco Corporation, for itself and for the entity named as The American Tobacco Company (to which Brown & Williamson Tobacco Corporation is the successor by merger) (incorrectly referred to in the Judgment as Brown & Williamson Tobacco Company); Lorillard Tobacco Company; Philip Morris USA, Inc. (incorrectly referred to in the Judgment as Philip Morris, Inc.); Tobacco Institute, Inc. [2] Discussed infra Assignment of Error No. 7. [3] According to defendants, both class representatives made pre-trial admissions that they had quit smoking prior to trial. [4] Plaintiffs point out that although Article 2323 C was not enacted until 1996, the enactment merely codified existing jurisprudence.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1420203/	340 S.C. 266 (2000) 531 S.E.2d 512 The STATE, Respondent, v. John Bennett FENNELL, Appellant. No. 25097. Supreme Court of South Carolina. Heard February 1, 2000. Filed March 27, 2000. Refiled May 1, 2000. 268 Assistant Appellate Defender Aileen P. Clare of the South Carolina Office of Appellate Defense, for appellant. Attorney General Charles M. Condon, Chief Deputy Attorney General John W. McIntosh, Assistant Deputy Attorney General Donald J. Zelenka, and Assistant Attorney General Jeffrey A. Jacobs, all of Columbia, and Solicitor John R. Justice of Chester, for respondent. ORDER We withdraw State v. Fennell, Op. No. 25097 (S.C. Sup.Ct. filed March 27, 2000) (Shearouse Adv. Sh. No. 12 at 43). We hereby substitute in its place the attached opinion. IT IS SO ORDERED. 269 /s/ Jean H. Toal, C.J. /s/ James E. Moore, J. /s/ John H. Waller, Jr., J. /s/ E.C. Burnett, III, J. /s/ Costa M. Pleicones, J. WALLER, Justice: John Bennett Fennell (appellant) was indicted for the murder of one man and the assault and battery with intent to kill (ABIK) of a second man. A jury found him guilty but mentally ill on both charges. He was sentenced to life in prison for murder and twenty years for ABIK. We affirm. FACTS Appellant was diagnosed as suffering from paranoid schizophrenia in 1984. Appellant's illness led to the loss of his job as an accountant, a divorce, and his decision to move from Columbia back to Chester County to live with his elderly mother. Appellant joined the Chester Civitan Club and was appointed to oversee its "candy box" program. He was responsible for collecting money from boxes left in stores, replenishing the candy, and making deposits. He took the job very seriously and usually performed it well. In fall 1996, William R. Thrailkill, the owner of a home remodeling business and a Civitan Club member also involved in the candy box program, and appellant had a dispute about an empty candy box at a local store. The argument angered and upset appellant. At a Civitan Club meeting at a restaurant about two weeks later, neither appellant nor Thrailkill initially appeared upset. Appellant approached Thrailkill to discuss the candy box matter again as Thrailkill, his son, and other members formed a line at the buffet. Thrailkill refused to discuss it and made a disparaging remark that angered appellant. Appellant immediately left the room and retrieved a .38-caliber revolver from his car. Appellant strode back into the restaurant, declaring he was "going to kill that son of a bitch." He emptied his gun at Thrailkill, striking him with five shots. Thrailkill died at a 270 hospital two months later from complications caused by his injuries. A stray bullet struck Elihue Armstrong, a semi-retired grocer and barber who was standing nearby, in the right arm and chest. Armstrong survived the injuries. Appellant told a psychiatrist that he did not intend to injure Armstrong. Appellant moved for a directed verdict on the ABIK charge. Appellant asserted that the State had failed to prove he intended to kill Armstrong, and the doctrine of transferred intent did not apply. The judge denied the motion. ISSUE Did the trial judge err in refusing to direct a verdict on the ABIK charge because the doctrine of transferred intent is inapplicable when the intended victim is killed and a stray bullet injuresbut does not killan unintended victim? STANDARD OF REVIEW In considering a motion for a directed verdict, the trial court is concerned with the existence or non-existence of evidence, not with its weight. The case should be submitted to the jury if there is any direct evidence or substantial circumstantial evidence which reasonably tends to prove the guilt of the accused, or from which his guilt may be fairly or logically deduced. State v. Robinson, 310 S.C. 535, 426 S.E.2d 317 (1992). In reviewing the denial of a motion for a directed verdict, the evidence must be viewed in the light most favorable to the State. If there is any direct evidence or substantial circumstantial evidence reasonably tending to prove the guilt of the accused, the appellate court must find that the case was properly submitted to the jury. State v. Venters, 300 S.C. 260, 387 S.E.2d 270 (1990). DISCUSSION Appellant contends the trial judge erred in refusing to direct a verdict in his favor on the ABIK charge. The doctrine of transferred intent does not apply because any intent was "fully satisfied" by the death of Thrailkill (the intended victim); therefore, nothing was left to transfer to 271 Armstrong (the unintended victim). Furthermore, appellant argues, the doctrine is inapplicable because the harm appellant intended to inflict on Thrailkill (death) was not identical to the harm inflicted on Armstrong (injury). We disagree. Criminal liability normally is based upon the concurrence of two factors: the defendant's criminal intent and the actual, physical act constituting the offense. United States v. Bailey, 444 U.S. 394, 402, 100 S. Ct. 624, 630-31, 62 L. Ed. 2d 575 (1980) (cited in McAninch & Fairey, The Criminal Law of South Carolina 1 (1996)). A defendant may not be convicted of a criminal offense unless the State proves beyond a reasonable doubt that he acted with the criminal intent, or mental state, required for a particular offense. State v. Ferguson, 302 S.C. 269, 271, 395 S.E.2d 182, 183 (1990) (required mental state for particular crime may be purpose (intent), knowledge, recklessness, or criminal negligence). Appellant's first argument is easily resolved. Some have observed, as the prosecutor did at appellant's trial, that "malice follows the bullet." Such explanations, as well as the term "transferred intent" itself, are somewhat misleading. The defendant's mental state, or mens rea, whatever it may be at the time he allegedly commits a criminal act, is contained within the defendant's brain when he commits the act. That mental state never leaves the defendant's brain; it is not "transferred" from the defendant's brain to another person or place. A more apt description might be that the mental state is like a spotlight emanating from its sourcethe defendant's mindto its targetthe intended victim. Nor is that mental state in limited supply. The mental state "spotlight" is not extinguished at the moment a bullet strikes and kills the intended victim, such that there is no mental state left upon which to convict an unintended victim who also is injured or killed. See People v. Scott, 14 Cal. 4th 544, 59 Cal. Rptr. 2d 178, 927 P.2d 288, 292 (1996) ("[c]ontrary to what its name implies, the transferred intent doctrine does not refer to any actual intent that is capable of being `used up' once it is employed to convict a defendant of a specific intent crime against the intended victim"); State v. Hinton, 227 Conn. 301, 630 A.2d 593, 597-98 (1993) (rejecting argument that intent to kill may not be transferred to unintended victim 272 when intended victim is killed); Harvey v. State, 111 Md.App. 401, 681 A.2d 628, 637 (1996) (explaining that the mens rea is an elastic thing of unlimited supply which neither follows nor fails to follow the bullet, but never leaves the defendant's brain). The more difficult question is the one presented by the facts of this case and appellant's second argument. Is it appropriate to use the doctrine of transferred intentadmittedly a legal fictionto transfer appellant's alleged mental state with regard to Thrailkill, the intended victim who was killed, to Armstrong, the unintended victim who was injured but not killed? To pursue our analogy, the jury ordinarily may not unilaterally shift the defendant's mental state "spotlight" from one person to another. The jury simply must determine whether that spotlight existed, i.e., was it "on" or "off." The question in this case is whether it is appropriate to allow the jury to place its collective hand upon the "spotlight" of appellant's mental state and adjust the imaginary beam so that it encompasses not only Thrailkill, but also Armstrong in order to convict appellant of ABIK. Answering that question requires consideration of transferred intent cases decided by this Court and the role of the doctrine in our criminal law. This Court in several cases has held that a defendant may be found guilty of murder or manslaughter in a case of bad or mistaken aim under the doctrine of transferred intent. In the classic case, the defendant intends to kill or seriously injure one person, but misses that person and mistakenly kills another. Although the defendant did not act with malice toward the unintended victim, the defendant's criminal intent to kill the intended victim (i.e., his mental state of malice) is transferred to the unintended victim. "If there was malice in [defendant's] heart, he was guilty of the crime charged, it matters not whether he killed his intended victim or a third person through mistake." State v. Heyward, 197 S.C. 371, 377, 15 S.E.2d 669, 672 (1941) (affirming murder conviction where defendant testified he mistakenly shot and killed police officer who allegedly broke open his front door, believing the officer to be an assassin sent by an angry former employer). See also State v. Gandy, 283 S.C. 571, 324 S.E.2d 65 (1984) (affirming murder conviction where defendant intending to kill one man shot through a closed door, killing unintended victim 273 instead), overruled on other grounds by State v. Lowry, 315 S.C. 396, 434 S.E.2d 272 (1993); State v. Horne, 282 S.C. 444, 447, 319 S.E.2d 703, 704 (1984) (holding that State in future may prosecute defendant for murder of viable fetus when defendant attacks a pregnant woman with malice and in the process kills the fetus, an unintended victim); State v. Williams, 189 S.C. 19, 24, 199 S.E. 906, 908 (1938) (affirming murder conviction where defendant shot at intended victim who was driving a wagon of cotton, but missed him and mistakenly killed the man sitting beside him); LaFave & Scott, Substantive Criminal Law, § 3.12(d) (1986) (discussing transferred intent); McAninch & Fairey, at 17-19 (same). The unintended victim in the cases cited above was killed by the defendant. The Court has not decided a case such as the present one in which the intended victim was killed and the unintended victim was injured, but not killed. Some courts decline to resort to the doctrine of transferred intent when they are convinced this legal fiction is not needed to hold the defendant criminally liable for his acts. See State v. Brady, 745 So. 2d 954 (Fla.1999) (declining to apply transferred intent doctrine where bullet fired by defendant missed intended victim and injured unintended victim; jury properly convicted defendant on two counts of attempted second-degree murder, which does not require proof of specific intent to kill); People v. Birreuta, 162 Cal. App. 3d 454, 208 Cal. Rptr. 635 (1984) (declining to apply transferred intent doctrine when defendant intentionally kills one victim and accidentally kills another victim; in such cases defendant may be prosecuted for first and second degree murder, respectively), overruled on other grounds by People v. Flood, 18 Cal. 4th 470, 76 Cal. Rptr. 2d 180, 957 P.2d 869 (1998); Harvey v. State, 681 A.2d at 644 (holding that transferred intent is applicable only when the unintended victim is killed, not when the unintended victim is injured). The Harvey court found no unsolvable problems [under Maryland law] in punishing the unintended battery of a chance or unintended victim. The common law penalty for common law battery is, after all, unlimited and the defendant may receive any appropriate sentence without the necessity of transferring some 274 subtle mens rea from the intended target to the unintended target.... When the injury inflicted on the unintended victim, moreover, is at the non-fatal level of a battery, one does not need a transferred intent doctrine to establish basic criminal responsibility. Harvey, 681 A.2d at 642. Similarly, the Birreuta court, in a case in which both the intended and unintended victims were killed, found the transferred intent doctrine unnecessary because the defendant could be prosecuted for different degrees of murder under California law. We conclude that our criminal laws, unlike those of some other jurisdictions, make it necessary to impose the doctrine of transferred intent in this case. South Carolina recognizes three levels of assault: the offense of simple assault and battery,[1] the offense of assault and battery of a high and aggravated nature (ABHAN), and the offense of ABIK. ABHAN is a common law misdemeanor punishable by up to ten years in prison. State v. Hill, 254 S.C. 321, 331, 175 S.E.2d 227, 232 (1970); State v. Prince, 240 S.C. 96, 100, 124 S.E.2d 778, 780 (1962). ABHAN is the unlawful act of violent injury to another accompanied by circumstances of aggravation. State v. Frazier, 302 S.C. 500, 397 S.E.2d 93 (1990); State v. Foxworth, 269 S.C. 496, 238 S.E.2d 172 (1977). Circumstances of aggravation include the use of a deadly weapon, the intent to commit a felony, infliction of serious bodily injury, great disparity in the ages or physical conditions of the parties, a difference in gender, the purposeful infliction of shame and disgrace, taking indecent liberties or familiarities with a female, and resistance to lawful authority. Foxworth, 269 S.C. at 498, 238 S.E.2d at 173; State v. Hollman, 245 S.C. 362, 140 S.E.2d 597 (1965); State v. Tyndall, 336 S.C. 8, 21, 518 S.E.2d 278, 285 (Ct.App.1999). We have not explicitly identified any particular mental state the State must prove in order for a defendant to be found guilty of ABHAN. The State does not, however, have to prove the defendant acted with malice to obtain an ABHAN 275 conviction because the circumstances that give rise to ABHAN may also give rise to an inference of malice. Thus, a defendant may be convicted of ABHAN regardless of whether malice is present. State v. Pilgrim, 320 S.C. 409, 465 S.E.2d 108 (Ct.App.1995) (discouraging practice of comparing ABHAN to manslaughter injury charge because, when malice is the key issue, it is confusing to jurors and prejudicial to defendant to import the heat of passion and sufficient legal provocation elements of voluntary manslaughter into ABHAN charge), aff'd as modified in State v. Pilgrim, 326 S.C. 24, 482 S.E.2d 562 (1997), overruled on other grounds by State v. Foust, 325 S.C. 12, 479 S.E.2d 50 (1996). In contrast, ABIK is a felony punishable by up to twenty years in prison. S.C.Code Ann. § 16-3-620 (1985). The required mental state for ABIK, like murder, is malice aforethought. State v. Foust, supra (holding that State must show a general intent that defendant acted with malice to obtain ABIK conviction, and overruling cases indicating that defendant had to possess specific intent to kill to be guilty of ABIK); State v. Hinson, 253 S.C. 607, 611, 172 S.E.2d 548, 550 (1970) (defining assault and battery with intent to kill as "an unlawful act of violent nature to the person of another with malice aforethought, either express or implied"); S.C.Code Ann. § 16-3-10 (1985) (defining murder as "the killing of any person with malice aforethought, either express or implied").[2] The record shows appellant did not act with malice toward Armstrong, the unintended victim. Appellant was angry at Thrailkill, the intended victim, and he killed him. A stray bullet happened to strike Armstrong. Consequently, the only way the State could show that appellant allegedly acted with malice with regard to Armstrong, thereby possibly obtaining 276 an ABIK conviction and subjecting him to a twenty-year sentence, is through the doctrine of transferred intent. Appellant conceivably could be held liable for ABHAN, regardless of whether he acted with malice. The maximum penalty for ABHAN, however, is ten years. State v. Hill, supra (interpreting predecessor statute of S.C.Code Ann. § 17-25-20 (1985) to mean maximum punishment is ten years when statute does not establish the penalty). We conclude it would not be appropriate to limit the penalty and punishment to that provided for ABHAN under these circumstances. A person who, acting with malice, unleashes a deadly force in an attempt to kill or injure an intended victim should anticipate that the law will require him to answer fully for his deeds when that force kills or injures an unintended victim. Accordingly, we hold that the doctrine of transferred intent may be used to convict a defendant of ABIK when the defendant kills the intended victim and also injures an unintended victim. Our holding is consistent with the approach taken by other jurisdictions. "When a defendant contemplates or designs the death of another, the purpose of deterrence is better served by holding that defendant responsible for the knowing or purposeful murder of the unintended as well as the intended victim." State v. Worlock, 117 N.J. 596, 569 A.2d 1314, 1325 (1990) (affirming murder convictions where defendant shot and killed both intended and unintended victims); see also Hinton, 630 A.2d at 596-99 (rejecting Birreuta, supra, and upholding use of transferred intent where defendant fired into a group, killing three men and seriously injuring a fourth); Ochoa v. State, 981 P.2d 1201, 1205 (Nev.1999) (rejecting Birreuta, supra, and applying transferred intent to all crimes where an unintended victim is harmed as a result of defendant's specific intent to harm an intended victim regardless of whether the intended victim is injured; thus, it was appropriate to charge defendant who killed the intended victim and injured a bystander with a stray bullet with murder and attempted murder). We take this opportunity to clarify our decision in State v. Bryant, 316 S.C. 216, 218, 447 S.E.2d 852, 854 (1994). In that case, the defendant slammed a police officer against his patrol car during a struggle while resisting arrest, damaging the car. 277 The defendant was convicted of malicious damage to personal property. We affirmed the Court of Appeals' ruling that it was improper to submit the offense of malicious damage to personal property to the jury because [t]he only reasonable inference from the evidence is that the damage to the patrol car was an unintended harm. The doctrine of transferred intent applies only in the situation of the same intended harm inflicted on an unintended victim.... The intent to assault and batter the police officer cannot be transferred to the property damage since the harm caused was different from the type of harm intended. Id. at 219, 447 S.E.2d at 854. Bryant may be read to say the doctrine of transferred intent is inapplicable when the harm caused (injury to property) is different from the type of harm intended (injury to a person). Thus, the case at hand is distinguishable from Bryant because appellant intended to harm one person and in the process harmed another person. On the other hand, Bryant could be read to say that intent is not transferable when the harm caused (injuring a person) is different from the type of harm intended (killing a person). Under that interpretation, appellant's intent would not be transferable. We find the former interpretation more appropriate than the latter, and so we distinguish appellant's case from Bryant. A coincidental damaging of property while intending to harm a person simply presents a different situation than harming one person while intending to harm another person.[3] CONCLUSION We hold that the doctrine of transferred intent may be used to convict a defendant of ABIK when the defendant kills the intended victim and also injures an unintended victim. We *278 affirm appellant's ABIK conviction and the twenty-year sentence. AFFIRMED. TOAL, C.J., MOORE and BURNETT, JJ., and Acting Justice EDWARD B. COTTINGHAM, concur. NOTES [1] S.C.Code Ann. § 22-3-540 to -560 (1989 & Supp.1999) (simple assault and battery is a misdemeanor within jurisdiction of magistrate's court, with a maximum penalty of $500 or thirty days imprisonment). [2] "Malice is defined as being hatred or Malice is wrongful intent to injure another person. It indicates a wicked or depraved spirit intent on doing wrong. Malice is a legal term implying wickedness and excluding a just cause or excuse. The term malice indicates a formed purpose and design to do a wrongful act under the circumstances that exclude any legal right to do it." State v. Fuller, 229 S.C. 439, 93 S.E.2d 463, 466 (1956); Heyward, 197 S.C. at 375, 15 S.E.2d at 671. [3] We do not mean to imply that we would distinguish Bryant in a similar manner if the defendant injured a person while intending to damage property. Given our reasoning in this case, the doctrine of transferred intent might apply in a case in which the defendant, for example, unintentionally harmed a person when he intentionally fired a weapon at a supposedly vacant house.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2336779/	216 S.W.3d 809 (2006) Lilith BRAINARD, et al., Petitioners, v. TRINITY UNIVERSAL INSURANCE COMPANY, Respondent. No. 04-0537. Supreme Court of Texas. Argued April 14, 2005. Decided December 22, 2006. Rehearing Denied April 13, 2007. 811 Bryan W. Scott, Katy, for Petitioner. Gregory R. Ave, Walters, Balido & Crain, L.L.P., Dallas, for Respondent. Chief Justice JEFFERSON delivered the opinion of the Court. This case presents the following issues: (1) whether uninsured/underinsured motorist (UIM) insurance covers prejudgment interest that the underinsured motorist would owe the insured in tort liability; (2) if so, how to apply settlement and personal injury protection (PIP) credits to the interest calculation; and (3) the circumstances under which an insured may recover attorney's fees from the UIM insurer under Chapter 38 of the Civil Practice and Remedies Code. We hold that: (1) UIM insurance covers this prejudgment interest; (2) under the "declining principal" formula, each credit is applied according to the date on which it was received; and (3) the insured may recover attorney's fees under Chapter 38 only if the insurer does not tender UIM benefits within thirty days after the trial court signs a judgment establishing the liability and underinsured status of the other motorist. We reverse the court of appeals' judgment in part, affirm in part, and remand this case to the trial court to calculate prejudgment interest consistent with this opinion. I Background On July 1, 1999, Edward H. Brainard II was killed when his vehicle was involved in a head-on collision with a rig owned by Premier Well Service, Inc. His widow, Lilith Brainard, and their five children (collectively, Brainard) brought a wrongful death action against Premier and sought UIM benefits from Trinity Universal Insurance Company under a policy issued to the family business, Brainard Cattle Company. Trinity paid Brainard $5,000 under the policy's PIP provision but requested further information supporting the UIM claim. Brainard alleges she submitted the information and performed all conditions precedent to receiving the benefits, but Trinity never paid. Eventually, Brainard joined Trinity as a defendant, alleging breach of contract, breach of the common law duty of good faith, violations of the Deceptive Trade Practices-Consumer Protection Act, and violations of Insurance Code articles 21.21 and 21.55. On December 7, 2000, Brainard and Premier settled Brainard's claims for $1,000,000, Premier's policy limit, and Premier was subsequently dismissed from the suit. When Brainard demanded that Trinity also tender the $1,000,000 UIM policy limit, Trinity countered with an offer of $50,000. The trial court severed Brainard's extra-contractual claims, which remain pending, and the parties proceeded to trial on the UIM contract. A jury found that Premier's negligence caused the accident and awarded Brainard $1,010,000 for pecuniary loss, funeral expenses, loss of companionship and society, and mental anguish. The jury also awarded $100,000 for attorney's fees. 812 The trial court applied a $1,005,000 credit for Brainard's settlement and PIP benefits, and signed a judgment against Trinity for the remaining $5,000 in damages plus $100,000 in attorney's fees. On appeal, Trinity challenged the attorney's fees award, and Brainard, by cross appeal, alleged the trial court erred in refusing to award prejudgment interest on the $1,010,000 in actual damages. The court of appeals reversed that portion of the trial court's judgment awarding attorney's fees and affirmed the denial of prejudgment interest. 153 S.W.3d 508, 513. Because both points have engendered disagreement among the courts of appeals, we granted Brainard's petition for review. 48 Tex. Sup.Ct. J. 439 (Mar. 11, 2005). II Recovery of Prejudgment Interest The Insurance Code requires insurers to offer Texas motorists UIM coverage and mandates that such coverage: provide for payment to the insured of all sums which he shall be legally entitled to recover as damages from owners or operators of underinsured motor vehicles because of bodily injury or property damage in an amount up to the limit specified in the policy, reduced by the amount recovered or recoverable from the insurer of the underinsured motor vehicle. TEX. INS.CODE art. 5.06-1(5). A motorist is underinsured if his or her liability insurance is insufficient to pay for the injured party's actual damages. Stracener v. United Servs. Auto. Ass'n, 777 S.W.2d 378, 380 (Tex.1989). Because the jury valued Brainard's damages at $1,010,000, and Premier's liability policy limit was $1,000,000, Premier was underinsured. The trial court correctly applied the sum of Premier's $1,000,000 liability limit and Brainard's $5,000 PIP recovery as an offset to actual damages. Mid-Century Ins. Co. of Tex. v. Kidd, 997 S.W.2d 265, 271 (Tex.1999); Stracener, 777 S.W.2d at 380. Thus, Trinity does not dispute that the $5,000 difference is covered under Brainard's UIM policy. The issue is whether, in addition to this amount, UIM insurance covers prejudgment interest that Premier would owe on the $1,010,000 in actual damages. We conclude that it does. Prejudgment interest is awarded to fully compensate the injured party, not to punish the defendant. Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549, 552 (Tex.1985), superseded in part by statute, Act of June 3, 1987, 70th Leg., 1st C.S., ch. 3, § 1, 1987 Tex. Gen. Laws 51, 51-52, as recognized in Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507 (Tex.1998) and C & H Nationwide, Inc. v. Thompson, 903 S.W.2d 315, 327 (Tex.1994). It is "`compensation allowed by law as additional damages for lost use of the money due as damages during the lapse of time between the accrual of the claim and the date of judgment.'" Johnson & Higgins, 962 S.W.2d at 528 (quoting Cavnar, 696 S.W.2d at 552). By statute, "[a] judgment in a wrongful death, personal injury, or property damage case earns prejudgment interest." TEX. FIN.CODE § 304.102. Thus, if Brainard obtained a judgment against Premier for past damages resulting from the collision, Premier would be liable for prejudgment interest. Whether Brainard may recover this interest from Trinity is governed by their UIM insurance contract. In language closely tracking article 5.06-1(5), Brainard's policy states that Trinity will pay "damages which [Brainard] is legally entitled to recover from" Premier. We have consistently viewed prejudgment interest as falling within the common law meaning of damages, and Trinity does not argue that the Legislature 813 or the parties intended the term to convey a narrower meaning. TEX. INS.CODE art. 5.06-1(5); see, e.g., Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 898 (Tex.2000) (citing Cavnar, 696 S.W.2d at 552-54). Two courts of appeals have held that prejudgment interest constitutes damages that the insured is "legally entitled to recover" from the underinsured motorist. Norris v. State Farm Mut. Auto. Ins. Co., 217 S.W.3d 1, 7 (Tex.App.-Waco 2004, pet. granted); Menix v. Allstate Indem. Co., 83 S.W.3d 877, 880 (Tex.App.-Eastland 2002, pet. denied); Allstate Indem. Co. v. Collier, 983 S.W.2d 342, 343 (Tex.App.-Waco 1998, pet. dism'd by agr.). Trinity's primary argument to the contrary, upon which the court of appeals relied, emphasizes that the UIM policy, like article 5.06-1(5), requires Trinity to pay only those damages which the insured is legally entitled to recover "because of bodily injury or property damage." 153 S.W.3d at 512; see also TEX. INS.CODE art. 5.06-1(5). Trinity contends that this qualification negates coverage for prejudgment interest because the essence of prejudgment interest is compensation for lost use of money, not damages from bodily injury. Further, Trinity suggests that Brainard's interpretation of the UIM endorsement would require the insurer to cover all damages assessed against the underinsured motorist, yet the courts of appeals have held that UIM insurance does not cover punitive damages. See, e.g., Milligan v. State Farm Mut. Auto. Ins. Co., 940 S.W.2d 228, 232 (Tex.App.-Houston [14th Dist.] 1997, writ denied); State Farm Mut. Auto. Ins. Co. v. Shaffer, 888 S.W.2d 146, 148 (Tex.App.-Houston [1st Dist.] 1994, writ denied); Vanderlinden v. United Servs. Auto. Ass'n Prop. & Cas. Ins. Co., 885 S.W.2d 239, 242 (Tex.App.-Texarkana 1994, writ denied). Trinity's argument fails for several reasons. First, although several courts of appeals have held that UIM insurance does not cover punitive damages assessed against the underinsured motorist, none reached this result by adopting Trinity's narrow interpretation of damages "because of bodily injury." In fact, their reasoning effectively supports UIM coverage for prejudgment interest. In Shaffer, the court concluded that the phrase "because of bodily injury" was ambiguous because it could mean that the damages must (a) literally derive from a bodily injury or (b) arise as a result of bodily injury. Shaffer, 888 S.W.2d at 148-49. If this language were ambiguous and had been drafted by the insurance company, precedent would require that it be interpreted to favor the insured. Nat'l Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991). Most UIM provisions, however, recite nearly the exact text of article 5.06-1(5). For that reason, the Shaffer court inquired into the statute's legislative intent, which it found addressed in one of this Court's opinions. In Stracener, we concluded that the Legislature sought to protect "conscientious motorists from `financial loss caused by negligent financially irresponsible motorists.'" Stracener, 777 S.W.2d at 382 (quoting Act of Oct. 1, 1967, 60th Leg., R.S., ch. 202, § 3, 1967 Tex. Gen. Laws 448, 449). Accordingly, the court of appeals observed that a primary purpose of UIM insurance is compensatory; it protects against financial loss. Shaffer, 888 S.W.2d at 149. Other courts of appeals have added that neither deterring wrongful conduct nor punishing the defendant is accomplished when the UIM insurer pays punitive damages assessed against the underinsured motorist. Milligan, 940 S.W.2d at 231; Vanderlinden, 885 S.W.2d at 240-42. Thus, they have held that neither the language of article 5.06-1(5) 814 nor public policy supports coverage of punitive damages. We have already noted that prejudgment interest serves to compensate the injured party, not to punish the defendant. Johnson & Higgins, 962 S.W.2d at 528; Cavnar, 696 S.W.2d at 552. This distinction is apparent in the rule that "[p]rejudgment interest may not be assessed or recovered on an award of exemplary damages." TEX. CIV. PRAC. & REM.CODE § 41.007. Article 5.06-1(5)'s compensatory purpose is well served when the insured obtains, in addition to actual damages, any prejudgment interest that the underinsured motorist would owe the insured. Trinity's attempt to give the phrase "because of bodily injury" an artificially literal meaningso as to establish a nexus requirement that eliminates coverage for prejudgment interesthas no basis in the statute's history or our precedent, under which article 5.06-1 is liberally construed to protect persons who are legally entitled to recover damages from underinsured motorists. Stracener, 777 S.W.2d at 382. Moreover, Trinity's rigid reading proves too much, for it would entail splitting hairs even among purely compensatory damages, such as those for mental anguish and loss of society. Article 5.06-1(5) states that the insurer will pay the insured "all sums which he shall be legally entitled to recover as damages from owners or operators of underinsured motor vehicles because of bodily injury or property damage." TEX. INS.CODE. art. 5.06-1(5). The qualification "because of bodily injury or property damage" merely underscores that UIM insurance is compensatory. In addition, it clarifies what should be obvious that only injuries and damages caused by the motor vehicle accident are covered because if the qualification is omitted, the policy would not exclude damages arising from unrelated incidents and transactions between the parties. In sum, while it is true that prejudgment interest accrues over time because of lost use of money, it is equally accurate to say that it constitutes additional compensatory damages for the insured's bodily injury and property damage. Trinity's alternative argument against coverage for prejudgment interest is based on the contractual aspect of a UIM claim. Franco v. Allstate Ins. Co., 505 S.W.2d 789, 791-92 (Tex.1974) (noting that, "although ultimate recovery in this type of action depends upon proof of damages due to the tort of an uninsured third party, the cause of action against the insurer arises by reason of the written contract"). If the claim is purely contractual, as Trinity contends, then Finance Code section 304.102, which authorizes prejudgment interest in wrongful death, personal injury, and property damage cases, would have no application in this case. TEX. FIN.CODE § 304.102. The court of appeals adopted this approach, citing our decision in Henson v. Southern Farm Bureau Casualty Insurance Company, 17 S.W.3d 652, 653 (Tex. 2000), as additional support for the view that "the relationship between the Brainards and Trinity is that of contracting parties." 153 S.W.3d at 513. The reference to Henson deserves further discussion because our reasoning in that case clarifies the issues presented here. Henson was a passenger in a truck driven by Millican, which collided with a vehicle driven by Contreras. Henson, 17 S.W.3d at 652. Henson sued Millican and Contreras for negligence and, before establishing liability, settled with Contreras for $20,000her liability insurance limit. Id. at 652-53. A jury attributed one hundred percent of the negligence to Contreras and assessed Henson's damages at $133,842. Id. at 653. Within thirty days of the judgment, Henson and Millican's 815 UIM insurers tendered $45,000their combined UIM policy limits. Id. Henson, however, refused the payment and demanded prejudgment interest on top of the policy limits, alleging the interest began to accrue against the insurers from the earlier of 180 days after he gave notice of his claim or the day he filed suit against them. Id. at 653-54. The issue in Henson was whether prejudgment interest accrued on the insured's contractual claim for UIM benefits. The prejudgment interest which Henson could recover from Contreras in tort liability was not at issue, as the damages assessed by the jury already exceeded the UIM policy limit. We examined the insurer's obligation to pay damages which the insured is "legally entitled to recover" from the underinsured motorist and concluded that there is no contractual duty to pay benefits until the liability of the other motorist and the amount of damages suffered by the insured are determined. Id. at 653-64. Thus, we held that a UIM claim does not earn prejudgment interest until the insurer breaches the contract by withholding benefits after the insured has obtained a judgment establishing the liability and underinsured status of the other motorist. Id. at 654. The jury could have found that Contreras was not negligent or that Henson's damages did not exceed Contreras's liability insurance limit, precluding any recovery of UIM benefits. Id. Because the insurers tendered the benefits promptly after the jury made its findings, no contractual duty was breached, and Henson was not entitled to receive the benefits earlier than he did. Id. The question we answer todaywhether UIM insurance covers the prejudgment interest an underinsured motorist would owe the insured was not before us in Henson. Under section 304.102, Premier would be liable for prejudgment interest on $1,010,000. TEX. FIN.CODE § 304.102. The fact that Brainard's suit against Trinity is based on contract in no way renders the statute inapplicable. On the contrary, the UIM policy effectively incorporates the statute by requiring Trinity to pay damages which Brainard is "legally entitled to recover" from Premier. Section 304.102, like the law of negligence, is necessary to determine the liability of the underinsured motorist. The UIM policy, however, controls Trinity's obligations. Because Brainard obtained a judgment establishing the negligence and underinsured status of Premier, the contract requires Trinity to pay benefits. Henson, 17 S.W.3d at 654. Accordingly, we hold that UIM insurance covers prejudgment interest that the underinsured motorist would owe the insured. The court of appeals erred in affirming the trial court's judgment denying Brainard this recovery. III Calculation of Prejudgment Interest The parties do not challenge the calculation of actual damages; they agree that the trial court properly deducted Brainard's $1,000,000 settlement and $5,000 PIP recovery from the jury's $1,010,000 verdict, resulting in Trinity's liability for $5,000. Mid-Century Ins. Co., 997 S.W.2d at 271; Stracener, 777 S.W.2d at 380. Instead, the issue concerns how to apply these credits when calculating prejudgment interest. Based on the jury's verdict, Premier would have been liable for $1,010,000 in actual damages, plus prejudgment interest on this amount. Having concluded that UIM insurance covers this interest, we turn now to its calculation. Brainard's suit against Premier was for wrongful death. In a wrongful death case, prejudgment interest accrues beginning on the 180th day after the defendant receives 816 written notice of the claim or the day suit is filed, whichever occurs first, and ending on the day preceding the date judgment is rendered. TEX. FIN.CODE § 304.104. In this case, the prejudgment interest period commenced on January 19, 2000, when Brainard filed suit against Premier. Because the trial court signed its judgment on January 15, 2003, the period ended on January 14. Id. Prejudgment interest is computed as simple interest with a rate equal to the postjudgment interest rate applicable at the time judgment is rendered. Id. §§ 304.103, 304.104. The trial court's judgment set the rate at ten percent. Brainard contends that prejudgment interest is calculated on the entire $1,010,000 before applying credits. Accordingly, she seeks $263,430 in prejudgment interest ten percent interest on $1,010,000 from January 19, 2000, until August 29, 2002, the date the parties moved to enter judgment.[1] In Brainard's view, the interest is added to the jury's verdict before deducting settlement and PIP credits, so that the credits do not affect the prejudgment interest calculation. Trinity objects, arguing that Brainard should not continue to earn interest on $1,010,000 in damages despite having already received $1,005,000 in compensation. We agree. We recently touched on this issue in Battaglia v. Alexander, 177 S.W.3d 893, 908-09 (Tex.2005), in which we held that the trial court erred in calculating prejudgment interest on total damages before deducting payments that the plaintiff received from settling defendants. Although Battaglia involved health care liability claims subject to section 16.02 of former Revised Civil Statutes article 4590i, we established a framework that resolves the issue presented here. We reiterated that prejudgment interest is compensation "`for lost use of the money due as damages during the lapse of time between the accrual of the claim and the date of judgment.'" Id. at 907 (quoting Cavnar, 696 S.W.2d at 552). Therefore, compensation other than for lost use of money is not interest but a windfall for the claimant and a penalty to the defendant. Id. We concluded that, to satisfy the purpose of prejudgment interest, settlements must be credited periodically, according to the date they are received. Id. at 907-08. This approach, known as the "declining principal" formula, is the proper way to apply credits in the calculation of prejudgment interest. Id. at 909 (overruling in part C & H Nationwide, Inc. v. Thompson, 903 S.W.2d 315, 327 (Tex.1994)). In Battaglia, we concluded that "[a] settlement payment should be credited first to accrued prejudgment interest as of the date the settlement payment was made, then to `principal,' thereby reducing or perhaps eliminating prejudgment interest from that point in time forward." Id. at 908. Thus, as we explain below, each credit applies first to the accrued interest and then to the principal, with each credit establishing a new interval. At each new interval, interest continues to accrue only on the remaining principal because under the general prejudgment interest provisions, "interest is computed as simple interest and does not compound." TEX. FIN. CODE § 304.104. Under the "declining principal" formula, the trial court is to consider the date on which the insured received each payment. Trinity paid Brainard $5,000 in PIP benefits shortly after the July 1, 1999 collision. Because there is no dispute that 817 this payment was made sometime in July, well before the prejudgment interest period commenced, we may assume it was July 31. Brainard settled with Premier for $1,000,000its liability insurance limiton December 7, 2000. On March 9, 2001, Trinity offered to settle with Brainard for $50,000. See TEX. FIN. CODE § 304.106. Two weeks later, in a letter to Brainard's counsel, Trinity confirmed that the offer would remain open. Because Brainard's $5,000 recovery did not exceed Trinity's settlement offer, prejudgment interest did not accrue on the judgment after March 9, 2001. Id. § 304.105(a) ("If judgment for a claimant is equal to or less than the amount of a settlement offer of the defendant, prejudgment interest does not accrue on the amount of the judgment during the period that the offer may be accepted."). Following are the relevant dates: A. 07/31/1999 Brainard receives $5,000 PIP payment B. 01/19/2000 Prejudgment interest period begins when Brainard files suit C. 12/07/2000 Brainard receives $1,000,000 settlement D. 03/09/2001 Trinity offers Brainard $50,000 Brainard is entitled to recover prejudgment interest on the damages caused by Premier's negligence. The beginning principal is $1,010,000the amount of damages determined by the jury. The $5,000 PIP credit reduced the principal before prejudgment interest began to accrue. Thus, during the period from B to C, interest accrued on $1,005,000. At point C, the $1,000,000 credit is applied first to accrued prejudgment interest and then to principal. During the period from C to D, interest accrued on the principal remaining after application of the $1,000,000 credit. At point D, Brainard could have accepted Trinity's settlement offer, and interest ceased to accrue on that date. Trinity is liable for the remaining sum, up to Brainard's UIM policy limit, of the uncredited principal plus the uncredited interest that accrued from point C to point D. TEX. INS.CODE art. 5.06-1(5). We remand this case to the trial court to modify the judgment in accordance with this opinion. IV Attorney's Fees The final issue is whether Brainard may recover attorney's fees on her contract claim. The court of appeals reversed that portion of the trial court's judgment awarding Brainard $100,000 in attorney's fees. 153 S.W.3d at 510-11. Attorney's fees are recoverable from an opposing party only as authorized by statute or by contract between the parties. Travelers Indem. Co. v. Mayfield, 923 S.W.2d 590, 593 (Tex.1996). Chapter 38 of the Civil Practice & Remedies Code permits an insured to recover attorney's fees incurred in a successful breach of contract suit against the insurer unless the insurer is liable for the fees under a different statutory scheme. TEX. CIV. PRAC. & REM.CODE §§ 38.001(8), 38.006; Grapevine Excavation, Inc. v. Maryland Lloyds, 35 S.W.3d 1, 5 (Tex.2000). Because no other statutory scheme applies, Brainard seeks to recover the fees under Chapter 38. Under section 38.002, Brainard must show that: (1) she was represented by counsel; (2) she presented the claim to Trinity; and (3) Trinity failed to pay the just amount owed within thirty days of presentment. TEX. CIV. PRAC. & REM.CODE § 38.002. Brainard contends that her suit is like any other breach of contract suit, and therefore, presentment occurred on February 15, 2000, the day she made a claim for UIM benefits. Three courts of appeals support her position. See Norris v. State Farm, 217 S.W.3d at 3; State Farm Mut. Auto. Ins. Co. v. Nickerson, 130 S.W.3d 487, 490 (Tex.App.-Texarkana 2004, pet. granted); Allstate Ins. Co. v. 818 Lincoln, 976 S.W.2d 873, 876 (Tex.App.-Waco 1998, no pet.); Whitehead v. State Farm Mut. Auto. Ins. Co., 952 S.W.2d 79, 88-89 (Tex.App.-Texarkana 1997), rev'd on other grounds, 988 S.W.2d 744 (Tex.1998); Novosad v. Mid-Century Ins. Co., 881 S.W.2d 546, 552 (Tex.App.-San Antonio 1994, no writ). Trinity, on the other hand, argues that a UIM policy is different because the insurer's duty to pay does not arise until the underinsured motorist's liability, and the insured's damages, are legally determined. Five courts of appeals, including the court of appeals in this case, agree. See DeLaGarza v. State Farm Mut. Auto. Ins. Co., 175 S.W.3d 29, 34 (Tex.App.-Dallas 2005, pet. denied); Menix v. Allstate Indem. Co., 83 S.W.3d 877, 882 (Tex.App.-Eastland 2002, pet. denied); Sprague v. State Farm Mut. Auto. Ins. Co., 880 S.W.2d 415, 416 (Tex.App.-Houston [14th Dist.] 1993, writ denied); Sikes v. Zuloaga, 830 S.W.2d 752, 753 (Tex.App.-Austin 1992, no writ). This issue turns on the language in Chapter 38 requiring that "payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented." TEX. CIV. PRAC. & REM. CODE § 38.002(3). The purpose of presentment is to allow the opposing party a reasonable opportunity to pay a claim without incurring an obligation for attorney's fees. Jones v. Kelley, 614 S.W.2d 95, 100 (Tex. 1981). Thus, an essential element to recovery of attorney's fees under Chapter 38 in a suit based on contract is "the existence of a duty or obligation which the opposing party has failed to meet." Ellis v. Waldrop, 656 S.W.2d 902, 905 (Tex.1983). The UIM insurer is obligated to pay damages which the insured is "legally entitled to recover" from the underinsured motorist. TEX. INS. CODE art. 5.06-1(5). As discussed above, we have determined that this language means the UIM insurer is under no contractual duty to pay benefits until the insured obtains a judgment establishing the liability and underinsured status of the other motorist. Henson, 17 S.W.3d at 653-54. Neither requesting UIM benefits nor filing suit against the insurer triggers a contractual duty to pay. Id. Where there is no contractual duty to pay, there is no just amount owed. Thus, under Chapter 38, a claim for UIM benefits is not presented until the trial court signs a judgment establishing the negligence and underinsured status of the other motorist. Of course, the insured is not required to obtain a judgment against the tortfeasor. State Farm Mut. Auto. Ins. Co. v. Matlock, 462 S.W.2d 277, 278 (Tex. 1970). The insured may settle with the tortfeasor, as Brainard did in this case, and then litigate UIM coverage with the insurer. But neither a settlement nor an admission of liability from the tortfeasor establishes UIM coverage, because a jury could find that the other motorist was not at fault or award damages that do not exceed the tortfeasor's liability insurance. See Henson, 17 S.W.3d at 654. Brainard's contention that a UIM policy is to be treated like other contracts, for which damages are liquidated in a judicial proceeding and attorney's fees incurred are recoverable, misinterprets the nature of UIM insurance. The UIM contract is unique because, according to its terms, benefits are conditioned upon the insured's legal entitlement to receive damages from a third party. Unlike many first-party insurance contracts, in which the policy alone dictates coverage, UIM insurance utilizes tort law to determine coverage. Consequently, the insurer's contractual obligation to pay benefits does not arise until liability and damages are determined. Id. *819 Because the contract did not require Trinity to pay UIM benefits before Premier's negligence and underinsured status were determined, Brainard did not present a contract claim before the trial court rendered its judgment, and the court of appeals correctly concluded that Brainard is not entitled to recover attorney's fees under Chapter 38. V Conclusion We reverse the portion of the court of appeals' judgment that denied Brainard prejudgment interest, affirm the portion that denied attorney's fees, and remand this case to the trial court to calculate prejudgment interest consistent with this opinion. TEX.R.APP. P. 60.2(a), (d). Justice O'NEILL and Justice JOHNSON did not participate in the decision. NOTES [1] As explained above, however, the relevant date is that of the trial court's judgment, rather than when the parties moved for entry of judgment.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2453864/	327 F. Supp. 2d 720 (2004) Anna Harris WILLIAMS, Plaintiff, v. UNITED STATES of America, Dana L. Monford, Individually and as Temporary Administrator of the Estate of Leslie H. Williams, Jr., Equitable Life Assurance Society, Dennis Beck, Ryan D. Williams, David Wayne Smith, and Mary Linda McCall, Defendants. v. Dana L. Monford, as Temporary Administrator of the Estate of Leslie H. Williams, Jr., Cross-claim Defendant. No. CIV.A. H-02-4075. United States District Court, S.D. Texas, Houston Division. June 10, 2004. 721 Harold Norman May, May & McCreight LLP, Houston, TX, for Plaintiff and Counter-Defendant. William S. Chesney, III, Frank Elmore et al, Michael J. Cenatiempo, Cenatiempo & Gardner, Jason B. Ostrom, Cenatiempo & Ditta LLP, Houston, TX, for Defendants, Cross-Defendant and Counter-Claimant. Larry Miller Lesh, Locke Purnell Rain & Harrell, Dallas, TX, Gary F. Cerasuolo, Smith & Cerasuolo, LLP, Daniel F. Crowder, Attorney at Law, Houston, TX, Jack Morton Wilhelm, McCall & Ritchie, Austin, TX, for Defendants. Jonathan L. Blacker, Attorney at Law, Dallas, TX, for Defendants, Cross-Claimant and Counter-Defendant. MEMORANDUM AND ORDER WERLEIN, District Judge. Pending is Defendant/Cross-Claimant the United States of America's Motion for Summary Judgment (Document No. 46). After carefully considering the motion, response, reply and the applicable law, the Court concludes that the United States's motion should be granted. I. Background This is a tax liability case previously described in the Court's Memorandum and Order entered May 14, 2003 (Document No. 34). The United States ("Government") moves for summary judgment on its amended cross-claim against Dana L. Monford, as Temporary Administrator of the Estate of Leslie H. Williams, Jr. ("Monford"), which cross-claim seeks an order that the Estate of Leslie H. Williams, Jr. ("Estate") is indebted to the United States for $543,463.29 in federal income taxes, penalties, and interest owed for the tax years ending 1992, 1997, 1999, 2000, and 2001, plus statutory additions provided by law.[1] Monford contends that the Court lacks jurisdiction to enter such an order. II. Jurisdiction A. Standard of Review Although Monford does not formally move to dismiss the Government's amended cross-claim, she asserts as her only defense to the Government's motion for summary judgment that the Court lacks subject matter jurisdiction. The burden of establishing subject matter jurisdiction is on the party seeking to invoke it. St. Paul Reins. Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir.1998). In evaluating a motion to dismiss pursuant to Rule 12(b)(1), a court may consider: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir.1996); Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380, 1384 (5th Cir.1989). The question of subject matter jurisdiction is for the court to decide even if the question hinges on legal or factual determinations. Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.1981) (holding that the existence of disputed material facts does not preclude a court from evaluating the merits of a jurisdictional challenge). 722 B. Discussion As stated above, the Government's amended cross-claim seeks an order adjudging liability for certain federal income taxes, penalties, and interest owed for the tax years ending 1992, 1997, 1999, 2000, and 2001, plus statutory additions provided by law. See Document No. 42; No. 18. The Government asserts that this Court has jurisdiction under 26 U.S.C. § 7402(a) ("The district courts ... shall have such jurisdiction ... to render such judgments and decrees as may be necessary or appropriate for the enforcement of the internal revenue laws."), 28 U.S.C. § 1340 ("The district courts shall have original jurisdiction of any civil action arising under any Act of Congress providing for internal revenue, ..."), and 28 U.S.C. § 1345. In its Memorandum and Order enter May 14, 2003, the Court held that subject matter jurisdiction existed over the Government's cross-claim under 26 U.S.C. § 7402(a) and 28 U.S.C. § 1340. See Document No. 34, at 10 n. 2. The Government has established that the Court does have jurisdiction over its claim unless Monford's new argument has merit. Monford argues that the Court now lacks jurisdiction over the Government's amended cross-claim because the Government subsequently filed its claim for taxes in probate court. It was after the issuance of the Court's Memorandum and Order entered May 14, 2003 and after the Government's filing of its amended cross-claim that the Government filed its claim for taxes, penalties, interest, and statutory additions in Probate Court No. 1 of Harris County, Texas ("Probate Court"). The Government's authenticated claim against the Estate in the Probate Court was for $543,583.44 in unpaid taxes, penalties, and interest for the tax years 1992, 1997, 1999, 2000, 2001, and 2002. See Document No. 50 ex. A.[2] Monford allowed the claim and the Probate Court approved it as a class three claim. See id. exs. A, B. The Government then amended its claim to include interest and statutory additions dating from March 15, 2004. See id. ex. C. Monford also allowed the amended claim. See id. The Court takes judicial notice (1) that on May 10, 2004, the Probate Court approved the Government's amended claim, although without classifying it; and (2) that on May 20, 2004, the Probate Court authorized Monford to pay $83,949.59 to the Government as a partial credit on the amended claim. Because the Government filed its tax claim against the Estate in Probate Court, Monford argues that action on the Government's cross-claim in this Court would now interfere with proceedings in the Probate Court. Such interference, Monford contends, precludes the exercise of federal jurisdiction. "[A] federal court has no jurisdiction to probate a will or administer an estate." Markham v. Allen, 326 U.S. 490, 66 S. Ct. 296, 298, 90 L. Ed. 256 (1946); Breaux v. Dilsaver, 254 F.3d 533, 536 (5th Cir.2001). Markham stated this limitation on federal jurisdiction as follows: [F]ederal courts of equity have jurisdiction to entertain suits "in favor of creditors, legatees, and heirs" and other claimants against a decedent's estate "to establish their claims" so long as the federal court does not interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in the custody of the state court. Markham, 66 S.Ct. at 298 (quoting Waterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 30 S. Ct. 10, 12, 54 L. Ed. 80 (1909)); Breaux, 254 F.3d at 723 536. In determining whether a suit in federal court "interferes" with state probate proceedings, courts in the Fifth Circuit "consider[ ] whether the plaintiff's claim `implicates the validity of the probate proceedings or whether the plaintiff is merely seeking adjudication of a claim between the parties.'" Breaux, 254 F.3d at 536 (quoting Blakeney v. Blakeney, 664 F.2d 433, 434 (5th Cir.1981)). The Government's Motion for Summary Judgment on its amended cross-claim seeks an order that "Dana L. Monford, as Temporary Administrator of the Estate [ ] of Leslie H. Williams, Jr. is liable to the United States for the federal income (Form 1040) tax for the tax years ending 1992, 1997, 1999, 2000, and 2001 in the amount of $543,463.29, plus interest and statutory additions." See Document No. 46. Generally, "a determination of the validity and amount of the tax claims against [a] decedent's estate" does not "in any way interfere with the orderly process of the administration of the estate in the Probate Court, nor does it attempt to deal with the res of the estate or its orderly distribution." United States v. Estate of Slate, 304 F. Supp. 380, 382 (S.D.Tex.1969)(Singleton, J.). In Slate, the administratrix of the Slate estate had rejected the Government's claim and the Government then filed suit in federal court rather than in Probate Court. In dictum the Court stated, "[I]f the Probate Court had adjudicated the merits of plaintiff's claim, perhaps plaintiff would be barred from seeking relief in this Court." Slate's, 304 F.Supp. at 382. See also Vanderwater v. City Nat'l Bank, 28 F. Supp. 89 (E.D.Ill.1939) (stating that where the plaintiff filed his claims in county probate court, and appealed the judgment through the state court system, he could not thereafter litigate the same claims in federal court). Relying on Slate and Vanderwater, Monford argues that "[t]he validity and amount of [the Government's] Claim and Amended Claim has [sic] essentially been adjudicated when Monford approved them," and that the Court therefore lacks jurisdiction to make such a determination. Document No. 50, at 6. Neither Slate nor Vanderwater, however, stands for the proposition that a federal court lacks jurisdiction over a party's claim when a probate court has adjudicated the merits of a similar claim. In each case, with the dictum in Slate and the holding in Vanderwater, the implication is that principles of res judicata and comity may bar in federal court the re-litigation of a claim already adjudicated in probate court. These cases do not hold, however, that federal court is without subject matter jurisdiction, which in this case is plainly conferred by 26 U.S.C. § 7402(a) and 28 U.S.C. § 1340. The probate limitation on federal jurisdiction stated in Markham does not foreclose a federal court's "jurisdiction to adjudicate rights in such property where the final judgment does not undertake to interfere with the state court's possession save to the extent the state court is bound by the judgment to recognize the right adjudicated by the federal court." Markham, 66 S.Ct. at 298. The judgment sought here by the Government on the validity and amount of its tax claim neither interferes with the Probate Court's possession of Estate property nor implicates the validity of the probate court proceedings. The Probate Court had jurisdiction over the Government's claim for taxes in the Estate proceeding, and this Court, under the statutes cited above, has jurisdiction over the Government's tax claims against the Estate. It seems somewhat odd that the Government has sought to reduce its tax claim to judgments in both state and federal court, but no objection has been raised that the Government is barred here by res judicata or principles of comity. The Estate, presumably, is 724 protected from incurring double liability (and there is no indication that the Government intends such) by the authority of the Probate Court to authorize payments from the Estate to satisfy the judgment. This Court has no authority to interfere with the probate proceeding or with control of the property of the Estate that is in custody of the Probate Court and the Government has not requested any such action by this Court. This Court does have limited jurisdiction, however, to adjudge the tax liability of the Estate, which is all that is requested. The Estate's plea to the jurisdiction of the Court on the Government's amended cross-claim is therefore denied. III. Summary Judgment A. Standard of Review Rule 56(c) provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to inter-rogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The moving party must "demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Once the movant carries this burden, the burden shifts to the nonmovant to show that summary judgment should not be granted. See id. at 2553-54. A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials in a pleading, and unsubstantiated assertions that a fact issue exists will not suffice. See Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir.1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2514-15, 91 L. Ed. 2d 202 (1986)). "[T]he nonmoving party must set forth specific facts showing the existence of a `genuine' issue concerning every essential component of its case." Id. In considering a motion for summary judgment, the district court must view the evidence through the prism of the substantive evidentiary burden. See Anderson, 106 S.Ct. at 2513-14. All justifiable inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986). "If the record, viewed in this light, could not lead a rational trier of fact to find" for the nonmovant, then summary judgment is proper. Kelley v. Price-Macemon, Inc., 992 F.2d 1408, 1413 (5th Cir.1993) (citing Matsushita, 106 S.Ct. at 1351). On the other hand, if "the factfinder could reasonably find in [the nonmovant's] favor, then summary judgment is improper." Id. (citing Anderson, 106 S.Ct. at 2511). Even if the standards of Rule 56 are met, a court has discretion to deny a motion for summary judgment if it believes that "the better course would be to proceed to a full trial." Anderson, 106 S.Ct. at 2513. B. Discussion The uncontroverted summary judgment evidence shows that with respect to the tax years set forth in the amended cross-claim, the Estate is liable for federal income taxes, penalties, and interest totaling, as of March 15, 2004, $543,463.29. See Document No. 48 exs. 1-2. Aside from challenging jurisdiction, Monford presents no reason why the Court should not grant the Government summary judgment on its amended cross-claim. The Government's Motion for Summary Judgment is therefore granted. Monford expresses concern that such a judgment will allow the Government to *725 interfere with the administration of the Estate by attempting to levy on property within the control of the Probate Court. See Document No. 50, at 6. The Court does not anticipate that the Government will improperly interfere in the Probate Court's administration of the Estate. See, e.g., United States v. Silverman, 621 F.2d 961, 966 (9th Cir.1980), cert. denied 450 U.S. 913, 101 S. Ct. 1353, 67 L. Ed. 2d 337 (1981) ("This recognition by Congress of the unavailability of administrative collection procedures in the case of an estate of a decedent is consistent with the longstanding position of the Treasury that it may not levy on assets of a decedent's estate while in the custody of the probate court."). IV. Order For the reasons set forth, it is hereby ORDERED that Defendant/Cross-Claimant the United States of America's Motion for Summary Judgment (Document No. 46) is GRANTED, and it is hereby ORDERED that Dana L. Monford, as Temporary Administrator of the Estate of Leslie H. Williams, Jr., as of March 15, 2004, is liable to the United States for the federal income (Form 1040) tax for the tax years ending 1992, 1997, 1999, 2000, and 2001 in the amount of $543,463.29, plus interest and statutory additions. The Clerk will enter a copy of this Order and send a copy to all counsel of record. NOTES [1] After the Court issued its Memorandum and Order entered May 14, 2003, the United States amended its cross-claim to include the tax years 1992 and 2001. See Document No. 42. Although the United States asserted both its original and amended cross-claims against Anna Harris Williams as well as the Estate, the United States has since reached an agreed judgment with Anna Harris Williams resolving its claims against her. See Document No. 49. [2] The Government's claim in Probate Court was for $120.15 more than the amount of its cross-claim here. This de minimis disparity is not a point of argument between the parties.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1128980/	279 So. 2d 625 (1973) ATLAS ROOFING MANUFACTURING CO., INC. and Leopard Roofing Co., Inc. v. ROBINSON & JULIENNE, INC. No. 47011. Supreme Court of Mississippi. June 5, 1973. Henley, Lotterhos & Bennett, Hazlehurst and Jackson, McDavid, Edmonson & Stephens, Jackson, for appellants. Watkins & Eager, Elizabeth Hulen, Jackson, for appellee. 626 SMITH, Justice: The appellants are Atlas Roofing Manufacturing Company, Incorporated, and its subsidiary, Leopard Roofing Company, Incorporated, who were plaintiffs in the trial court. The appellee and cross-appellant, who was the defendant below, is Robinson and Julienne, Incorporated, an insurance agency or insurance brokerage firm. The direct appeal by Atlas and Leopard, referred to as Atlas, is from a judgment recovered by it against appellee in the Circuit Court of the First Judicial District of Hinds County, Mississippi, pursuant to a jury verdict in its favor, in the amount of $2,000.00. It is contended on this appeal by Atlas that it was entitled to recover $12,900.03, and by the cross-appellant that Atlas was not entitled to recover anything. Alternatively, cross-appellant says that, if mistaken in its primary position, the amount of the verdict was for the jury and that, in that event, the judgment appealed from should be affirmed. The gravamen of Atlas' complaint was that appellee, an insurance broker, had negligently failed to provide adequate fire insurance on its plant, and that, as a consequence, Atlas had been unable to collect the full amount of a fire loss sustained by it. The manufacturing activities of Atlas involved running roofing felt through hot asphalt at high temperatures which were very close to the ignition point. A number of insurance companies had refused to write fire insurance on its plant for this reason, and others, having written it, cancelled it. The extreme fire hazard was increased by the absence of any sprinkler system, Atlas considering the installation of such a system to be too expensive. In explaining the situation in which Atlas found itself with respect to fire insurance, Mr. Wood, its comptroller, who handled the transaction here involved for Atlas, 627 and who was the only witness offered at the trial by Atlas (except the broker, as an adverse witness), testified: We had instead of having a blanket policy on the whole plant, we had these policies that were written stating the amount of the specific insurance that covered each section of the plant, for there are more than one building involved in this plant and these buildings and machines located therein were scheduled. ...... We were having difficulty in maintaining coverage on the plant. Mr. Reilly was having trouble. He had companies he had written insurance with that wanted to cancel or some that were cancelled and then he would have to rewrite it. It was quite voluminous in the number of policies it took to cover the risk. ...... And the domestic companies were about forty different companies and they were cancelling their policies and we were getting notices of nonrenewal and so forth. And we were having a problem keeping Atlas Roofing covered. So I asked Mr. Sulser if I could investigate going to a surplus line market to try to get a coverage. Appellee was called upon by Wood to investigate the possibility of improving this situation by procuring other insurance, preferably with one company on the entire plant. After considerable effort, appellee was able to obtain an offer from Lloyds of London to issue certain insurance to Atlas and Leopard, which he submitted to Atlas. Negotiations for this were conducted through Lloyds Louisiana representative, Excess-Surplus Lines, Incorporated, agency of New Orleans. In speaking of this, Wood said: Well, initially, he had the authority to investigate the cost and whether it could be done this way. And then after he brought us a proposal we decided to let him write it with Lloyds of London. In August, 1965, Excess-Surplus Lines issued a cover note confirming a policy of insurance to be issued by Lloyds in conformity with the note and specifying the coverage to be afforded as follows: Outline of coverage: $725,000.00 excess of underlying $25,000.00 blanket Fire, Extended Coverage, Vandalism and Malicious Mischief insurance as per copy of Jefferson Insurance Company of N.Y. Policy No. S605594 on file with underwriters and/or companies, arranged as follows: Coinsurance 1st layer $75,000.00 excess of underlying 25,000.00 10% 2nd layer $300,000.00 excess of $100,000.00 52.5% 3rd layer 350,000.00 excess of $400,000.00 90% This cover note was transmitted to Atlas in August of 1965. The effective date of the insurance was August 1, 1965, and was to extend over a term of three years. The policy referred to in the cover note was duly issued by Lloyds and, acting upon instructions given by Atlas, was delivered by appellee to the holder of the mortgage upon the Atlas plant. This saved Atlas $11,499.10 in premiums. More than two years later, on December 11, 1967, while the Lloyds policy was in force, Atlas sustained a fire loss at its plant in the amount of $180,205.39. After considerable correspondence with Lloyds, Atlas accepted from that company payment of $167,205.36. Almost three years later, on December 10, 1970, Atlas brought the present action against appellee and demanded judgment for the difference between the amount it had received from Lloyds and the total amount of the loss. The original declaration appears to have been predicated upon a breach of an alleged contract between Atlas and the appellee under which, it was charged, appellee had agreed to furnish insurance of the same type as that provided by the former policies, and had failed to do so. A demurrer was filed to this declaration, setting 628 up, among other things, that the claim was barred by limitations as provided by Mississippi Code 1942 Annotated section 729 (Supp. 1972), and that there was improperly joined in one count an action in tort with an action for breach of contract. Atlas immediately asked leave to file an amended declaration. The amended declaration restated the claim, and although retaining some of the language used in its original charge that appellee had not fulfilled its agreement with respect to the insurance afforded, it also charged that its loss was due to negligence on the part of appellee in providing inadequate insurance. The contract feature of the claim appears not to have been pressed, or to have been tacitly abandoned in the course of the trial, and the question submitted to the jury was that of negligence. At the conclusion of the case, the jury returned a verdict for Atlas in the sum of $2,000.00. Atlas has appealed, contending that the jury verdict correctly fixed liability, but that it was in error in limiting recovery to $2,000.00 since, it is argued, it was entitled to recover the full sum of $12,900.03, that being the difference between the amount paid by Lloyds under the policy and the amount of the loss. The proof showed that the cover note sent to Atlas correctly outlined the type and extent of the coverage to be afforded under the Lloyds policy. The policy referred to in the cover note and issued by Lloyds contained the same provisions for coinsurance stated in the note. It was delivered, at the request of Atlas, to the holder of the mortgage on the Atlas plant. No complaint as to any of these provisions was ever interposed by Atlas from August, 1965 to December 11, 1967. The "40 or 50" policies previously held by Atlas (and which constantly were changing) prior to the Lloyds policy were not exhibited with the declaration nor introduced into evidence and the terms of these policies are not disclosed in any adequate way, nor was it shown which were in effect and which had been cancelled immediately prior to or upon the effective date of the Lloyds policy. While Mr. Wood, comptroller of Atlas, said that he "did not believe" that the former policies had contained coinsurance provisions, this "belief" was excluded on timely objection and the matter was not pursued. Moreover, the amended declaration itself alleges that the former policies had, in fact, contained coinsurance clauses, the terms of which, as stated, were not proved. The witness' recollection and interpretation of the 40 or 50 absent and unidentified policies would not have sufficed to establish the actual terms of such policies with sufficient specificity in any event. Neither was it shown that there was available to Atlas, when the Lloyds policy was accepted, insurance upon its ultrahazardous enterprise which would have afforded better coverage whether at the same or greater premium, nor was it shown what the cost would have been for 100 percent coverage, nor that such coverage was obtainable. It is argued by appellee, with considerable cogency, that Atlas was entitled to recover the full amount of its loss from Lloyds under the terms of the policy issued by it, and that Atlas had accepted less and failed to recover the entire loss solely because it neglected to pursue its claim in the courts. This contention, apart from any intrinsic validity, points up the question raised by the argument on behalf of Atlas that it would not have been able to recover the full amount under the terms of the policy even if it had brought suit against Lloyds. In order to sustain its position in this regard, Atlas had the burden of demonstrating that full coverage was not provided by the Lloyds policy and that consequently Lloyds was not liable. The difficulty in deciding this controversy in the present case lies in the fact that Lloyds is not a party to this suit and there is no way of knowing what its position would be nor what defenses it would interpose. Lloyds' liability, vel non, cannot be determined in an action to which it has not been made a party. 629 It is true that: An insurance agent owes the duty to his principal to exercise good faith and reasonable diligence to procure insurance on the best terms he can obtain. .. . Annot., 29 A.L.R. 2d 187 (1953). We think the record shows that appellee acted in good faith and with reasonable diligence, and that the terms of the insurance were fully and fairly disclosed to Atlas, both by the cover note and the policy itself. In Mutual Life Insurance Company v. Hebron, 166 Miss. 145, 161, 146 So. 445, 448 (1933), it was said: The declaration of the agent as to the extent of the liability of the company under the disability provisions of the policy, were in effect a mere expression of opinion as to the legal effect of the contractual provision, a matter about which lawyers and judges have widely differed, as shown by recent litigation in this court. The statements of this agent, made to the husband of the appellee, that the company would not take advantage of the delay, and that the appellee would lose nothing on account of the delay, was likewise in effect an expression of opinion... . Atlas had fair notice of the terms of the insurance and more than ample time to reject it if it did not consider it adequate or satisfactory. Here fraud was neither charged nor proved, the suit by Atlas does not purport to state a cause of action for breach of warranty, nor does the evidence establish that there was a warranty given Atlas by appellee. In this case about five years elapsed between the delivery of the cover note to Atlas, in which the type and terms of coverage to be provided were spelled out, and in which the extent of coinsurance was specified exactly, before complaint about the terms was made by Atlas. In addition to the cover note, the policy, in which the terms were, of course, set out, had also been, at the request of Atlas, in the hands of Atlas' mortgagee. In Travelers' Fire Insurance Company v. Price, 169 Miss. 531, 540, 152 So. 889, 892 (1934), appears the following: Appellee either knew or should have known she was affected with notice of the sole and unconditional ownership and the public conveyance for hire clauses in her policy, and that the soliciting and collecting agent had no right, under the plain language of the policy, to waive those clauses, and that such a waiver amounted to nothing, would not be binding on appellant. Appellant, therefore, had the right to stand on those clauses. The result is appellant was entitled to a directed verdict. In Rosenstock v. Mississippi Home Insurance Company, 82 Miss. 674, 681, 35 So. 309, 311 (1903), it was said: The silent acceptance of the policy by the assured closed the contract, and bound the assured to the agreement tendered by the policy... . See New York Life Insurance Company v. Mary E. O'Dom, 100 Miss. 219, 56 So. 379 (1911). Zepponi v. Home Insurance Company, 248 Miss. 828, 833, 834, 161 So. 2d 524, 526 (1964) was a case in which no one remembered the circumstances surrounding delivery of the policy. The insured stated that he never received it. After the loss the policy was found in possession of the mortgagee. The insured took the position that he was not charged with notice of the provisions of the policy. This Court held otherwise, saying: In the case at bar, five years had elapsed since the issuance of the policy and it was found in the possession of Insured's mortgagee. Obviously it was held by the mortgagee for Insured as well as for the mortgagee. We hold as a matter of law that Insured is charged with knowledge of the terms of the policy upon which he relied for protection for nearly five years. Nearly all lenders demand insurance *630 and hold the policy. We take notice that there are countless transactions where the mortgagees hold the fire insurance policies. Human memory is a frail record and the fact of delivery should not rest thereon after five years. We hold that under such circumstances there was a constructive delivery. There is no sound reason for holding otherwise. We have concluded upon the whole record that Atlas failed to meet the burden which rested upon it to establish by evidence that its loss was the result of negligence upon the part of appellee. The peremptory instruction requested by appellee should have been granted. The direct appeal is denied, and on cross-appeal the judgment appealed from will be reversed and judgment will be entered here for appellee. On cross-appeal judgment appealed from is reversed and judgment is entered here for appellee. GILLESPIE, C.J., and PATTERSON, ROBERTSON and SUGG, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1289250/	207 Ga. App. 756 (1993) 429 S.E.2d 304 BOYNTON v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. A92A1852. Court of Appeals of Georgia. Decided March 11, 1993. Falanga, Barrow & Chalker, Robert A. Falanga, Jesse E. Barrow III, for appellant. Powell, Goldstein, Frazer & Murphy, Dean S. Daskal, C. Scott Greene, Elmer A. Simpson, Jr., Richard C. Mitchell, Michael S. French, King & Spalding, Eugene G. Partain, for appellee. COOPER, Judge. Appellant is a policyholder and member of appellee, a "mutual" insurance company. Appellant brought a putative class action against appellee, alleging that appellee breached various duties it owed to its policyholders with respect to use of income in excess of the amount required for payment of claims, operating costs, and the maintenance of a reasonable reserve. She appeals from the trial court's denial of her motion for default judgment, the grant of appellee's motion for summary judgment on her claims based on fraud, misrepresentation, and the Deceptive Trade Practices Act, and the grant of appellee's motion to dismiss her breach of contract and conversion counts for failure to state a claim. 1. Appellant first argues that the trial court abused its discretion in opening appellee's default and denying her motion for default judgment. Appellant filed her complaint February 2, 1990. Within the extended period for an answer agreed to by the parties, appellee filed a motion to dismiss for failure to state a claim which arguably contained a general denial of the allegations of appellant's complaint. However, appellee did not file an actual answer until March 21, 1991, after its motion to dismiss was partially denied. Appellant made no motion for default judgment or to strike the answer at that time. Then, in November 1991, after appellant's motion for class certification had been denied and appellee had filed a motion for summary judgment, appellant moved for default judgment. "At any time before final judgment, the court, in its discretion, upon payment of costs, may allow the default to be opened ... where the judge, from all the facts, shall determine that a proper case has been made for the default to be opened. ..." OCGA § 9-11-55 (b). "The rule permitting opening of default is remedial in nature and should be liberally applied [cit.], for default judgment is a drastic sanction that should be invoked only in extreme situations. [Cits.] Whenever possible cases should be decided on their merits for default judgment is not favored in law. [Cits.]" Ewing v. Johnston, 175 Ga. App. 760, 764 (1c) (334 SE2d 703) (1985). In this case the trial court determined, among other things, that this was a proper case for opening default. Assuming arguendo that appellee was in default and that appellant had not waived her right to seek a default judgment, we conclude that the trial court did not abuse its discretion in determining that this was a proper case for opening default. See Donalson v. Coca-Cola Co., 164 Ga. App. 712 (1) (298 SE2d 25) (1982). 2. Appellant next contends the trial court erred in granting summary judgment to appellee on her fraud, misrepresentation, and Deceptive 757 Trade Practices Act claims because genuine issues of material fact remained and her motion to compel discovery was pending. Appellant's basic theory is that appellee's use of the word "mutual" in its name and advertising, its charge of a membership fee, and its statement in promotional materials that appellee will pass along to policyholders any savings resulting from efficient operations all give the false impression that company proceeds in excess of those needed for operations and a reasonable reserve will be distributed to policyholders as dividends, in the form of a credit against their next premium. Moreover, appellant asserts, if she is allowed to discover additional promotional materials, she may be able to present additional misleading representations along these lines. However, the "Mutual Conditions" sections of appellant's policies with appellee clearly stated that the policyholder "is entitled ... to receive dividends the Board of Directors in its discretion may declare" and/or "to share in the earnings and savings of the company in accordance with the dividends declared by the Board of Directors." Whether the cause of action is fraud or misrepresentation, "`"[m]isrepresentations are not actionable unless the complaining party was justified in relying thereon in the exercise of common prudence and diligence."'" Guernsey Petroleum Corp. v. Data Gen. Corp., 183 Ga. App. 790, 793 (2b) (359 SE2d 920) (1987). In light of the clear statements in appellant's policies that she was entitled to share in company earnings and savings only if and to the extent dividends were declared by the Board in its discretion, any reliance on impressions to the contrary she may have received from appellee's name, the membership fee, or promises in appellee's promotional materials was not justified as a matter of law. Moreover, the same clear statements preclude injunctive relief and recovery of costs[1] under the Uniform Deceptive Trade Practices Act, OCGA §§ 10-1-372 and 10-1-373, for a name or promotion violates that Act only if it is misleading or confusing to those "using reasonable care." Giant Mart Corp. v. Giant Discount Foods, 247 Ga. 775, 777 (279 SE2d 683) (1981). Contrary to appellant's contention, the term "mutual" does not necessarily mean that income in excess of operating costs and a reasonable reserve is rebated to the policyholders in the form of dividends every year. See, e.g., OCGA § 33-14-2 (1) ("mutual insurer" is any incorporated insurer without shareholders which is owned and governed instead by its policyholders). In light of an explicit provision to the contrary, an actual or potential policyholder using reasonable care would not be misled or confused by the assumption that "mutual" 758 has the meaning appellant desires. Accordingly, no genuine issue of material fact remained as to appellant's fraud, misrepresentation, and Deceptive Trade Practices Act claims. Moreover, no additional materials appellant might discover could negate the lack of justifiable reliance and reasonable care that stand as barriers to her recovery. Thus, summary judgment was properly granted despite the pending motion to compel. 3. Appellant also asserts that the trial court erred in granting appellee's motion to dismiss her breach of contract and conversion claims. "A motion to dismiss for failure to state a claim is not to be granted unless under the pleadings, construed in a light most favorable to the plaintiff, plaintiff can establish no set of facts that would entitle it to relief against the defendant." Wehunt v. ITT Business &c. Corp., 183 Ga. App. 560, 561 (2) (359 SE2d 383) (1987). The validity of appellant's breach of contract and conversion claims depends on the validity of her assertion that she had a contractual right to her pro rata share of the company's income in excess of its needs. Yet the possibility of such a contractual right was negated by each of the Mutual Conditions provisions quoted in Division 2, supra. The first of those provisions, which entitled appellant to dividends the Board in its discretion declared, was attached as an exhibit to appellant's complaint, and was thus part of the pleadings. See H & R Block v. Asher, 231 Ga. 780 (204 SE2d 99) (1974). Accordingly, it was not possible for appellant to prove facts consistent with her pleadings which would support her breach of contract and conversion claims, and the trial court did not err in granting appellee's motion to dismiss those claims. Judgment affirmed. Andrews and Blackburn, JJ., concur in judgment only. McMurray, P. J., disqualified. NOTES [1] Civil damages are never available under this Act. Lauria v. Ford Motor Co., 169 Ga. App. 203 (3) (312 SE2d 190) (1983).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1790238/	177 S.W.3d 537 (2005) G.R.A.V.I.T.Y. ENTERPRISES, INC., Appellant, v. REECE SUPPLY COMPANY, Appellee. No. 05-04-00637-CV. Court of Appeals of Texas, Dallas. August 9, 2005. Rehearing Overruled December 13, 2005. 540 Craig P. Henderson, William W. Wolf, P.C., Dallas, for appellant. Carlyle H. Chapman, Thomas F. Loose and Wendy Lorraine Howza, Locke Lidell & Sapp LLP, Dallas, for appellee. Before Justices WHITTINGTON, FITZGERALD, and RICHTER. OPINION Opinion by Justice FITZGERALD. G.R.A.V.I.T.Y. Enterprises, Inc. (Gravity) appeals the judgment for $217,142.50 for attorney's fees rendered against it in favor of Reece Supply Co. in this breach of contract action. Gravity brings nine issues asserting the trial court erred in rendering a take-nothing judgment on its claims against Reece and in awarding Reece its attorney's fees. We conclude the trial court erred in awarding Reece attorney's 541 fees, render judgment that Reece take nothing against Gravity, and otherwise affirm the trial court's judgment. BACKGROUND Gravity is a commercial sign manufacturer, and Reece is a supplier to sign manufacturers. In 1997, Gravity received an order for about 2700 neon signs to advertise the customer's products. Most of these signs needed to have adjustable brightness, that is, be "dimmable," through a knob on the sign's transformer. Gravity required the transformers not cost more than $40 each. In October 1997, Gravity contacted Reece about obtaining the transformers, and Reece contacted Lighting Components. Tom Hull, the president of Lighting Components, went to Gravity's manufacturing plant, saw the signs, and spoke with Gravity's employees. Hull explained to Reece and Gravity that Lighting Components did not make a dimmable transformer, but given the size of the order, it could design one based on its nondimmable transformer. According to Gravity, the representation was made that Lighting Components had previously manufactured the dimmable transformer and so would not have to design a new one. Hull determined Lighting Components could sell the transformers to Reece for about $32, and Reece agreed to sell them to Gravity for $36.69, well within Gravity's $40 price break. Due to its history with Gravity, Reece required Gravity obtain a letter of guaranty from a bank securing payment for the transformers. When Gravity obtained the letter of guaranty, Reece placed the order for the dimmable transformers with Lighting Components. Gravity received a shipment of 50 of the dimmable transformers in March 1998 and another shipment of 2200 dimmable transformers in May 1998. In March, when it hooked up ten of the transformers to the neon tubing for the signs, six of the transformers shut down, and four of them ran hot. Testimony about how hot the transformers were varied from "a little warm" to hot enough to burn a person touching them. Gravity contacted Reece, who contacted Lighting Components. Hull explained that Lighting Components' transformers ran warmer than other manufacturers' transformers because they were designed to dissipate heat into the surrounding air through their aluminum cases. This heat-dissipation feature protected the internal components of the transformers and allowed Lighting Components to give a longer warranty on the transformers. In May 1998, after the delivery of the 2200 transformers, various Reece employees visited Gravity's facility to work on the problem of the transformers shutting down. According to Gravity's witnesses, none of Reece's employees were able to solve the problem. According to Reece's witnesses, Dan Blair, Reece's sales manager with over twenty years' experience in signs and neon signs, went to Gravity's plant and examined one of the signs. Blair testified the transformer worked when the "lid" was open but shut down when it was closed. Blair determined the problem was that the GTO cable, a highvoltage cable connecting the transformer to the neon tubing, was touching the neon tubing and the transformer when the lid was closed but was pulled free of them when the lid was open. The touching of the GTO cable to the neon tubing and the transformer caused the transformer to overload and shut down. Blair recommended putting sleeving on the GTO cable and using tube supports to keep the GTO cable away from the neon tubing and transformer. Blair used them on one of 542 the signs, and when the lid was closed, the transformer did not shut down. The terms of the agreement called for Gravity to pay Reece within seven days after shipping; however, Gravity did not pay Reece. On May 25, 1998, Gravity wrote the bank, informing it that the transformers "are a potential fire hazard" and that it had refused payment. In 1999, Reece turned over collection of the debt to its attorneys. Gravity declared bankruptcy in November 1999. Reece then demanded payment from the bank under the letter of guaranty, but the bank refused. Reece sued the bank and recovered a summary judgment for the amount owing for the transformers plus interest, costs, and Reece's attorney's fees. The defective condition, if any, of the transformers was not litigated. Following exhaustion of appeals, the bank paid the judgment. The bank then debited Gravity's account for the amount of the judgment plus the bank's attorney's fees. In this suit, Gravity sued Reece for the amount the bank debited its account plus its attorney's fees, asserting breach of warranty, breach of contract, violation of the Deceptive Trade Practices Act, and fraud. Reece counterclaimed for breach of contract and requested the fees and costs it incurred in defending against Gravity's suit. The jury found Gravity breached the contract and that Reece was not liable under any of the causes of action. The trial court entered judgment denying all relief sought by Gravity and awarding Reece its attorney's fees of $217,142.50. AMENDED PETITION In its second issue, Gravity asserts the trial court erred in striking its second amended petition filed November 21, 2003, ten days before trial. The trial court must allow the parties to amend their pleadings up to the deadline for amending pleadings. TEX.R. CIV. P. 63. Even after the time for filing amended pleadings has past, the trial court abuses its discretion in denying leave to file an amended pleading unless (1) the party opposing the amendment presents evidence of surprise or prejudice, or (2) the amendment asserts a new cause of action or defense, and thus is prejudicial on its face, and the opposing party objects to the amendment. State Bar v. Kilpatrick, 874 S.W.2d 656, 658 (Tex.1994); Greenhalgh v. Serv. Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex.1990); Graham v. Adesa Tex., Inc., 145 S.W.3d 769, 775 (Tex.App.-Dallas 2004, pet. filed). In these two situations, the decision to allow or deny the amendment rests with the sound discretion of the trial court, and the trial court's decision will not be overturned unless it constitutes a clear abuse of discretion. Kilpatrick, 874 S.W.2d at 658. In this case, Gravity does not dispute that its second amended petition asserted several new defenses and thus was prejudicial on its face; instead, Gravity argues it timely filed its second amended petition. The deadline for filing amended pleadings was set by the trial court's scheduling order. The trial court's enforcement of a scheduling order is reviewed for abuse of discretion. See Wil-Roye Inv. Co. II v. Washington Mut. Bank, FA, 142 S.W.3d 393, 401 (Tex.App.-El Paso 2004, no pet.); see also Clanton v. Clark, 639 S.W.2d 929 (Tex.1982) (trial court has discretion to manage its docket). A trialcourt abuses its discretion when it acts arbitrarily or unreasonably without reference to any guiding rules and principles. Adams v. First Nat'l Bank, 154 S.W.3d 859, 876 (Tex.App.-Dallas 2005, no pet.). Rule of civil procedure 63 permits a party to file amended pleadings without 543 leave of court up to seven days before trial. This case went to trial on December 1, 2003; thus, Gravity's second amended petition filed ten days before trial met this seven-day deadline. However, the seven-day deadline does not apply when the trial court has entered a scheduling order pursuant to rule 166 setting a different deadline. TEX.R. CIV. P. 63. In this case, the trial court entered a scheduling order pursuant to rule 166 and required all amended pleadings asserting new causes of action or defenses be filed no later than thirty days before the end of the discovery period.[1]See TEX.R. CIV. P. 166. The scheduling order did not expressly set out the dates of the discovery period but stated discovery would be controlled by rule of civil procedure 190.3. Under rule of civil procedure 190.3(b)(1)(B)(i), the discovery period ends "30 days before the date set for trial." TEX.R. CIV. P. 190.3(b)(1)(B)(i). In the scheduling order, the case was set for trial on May 19, 2003.[2] Thus, under rule 190.3 and the scheduling order, the discovery deadline was April 21, 2003 (April 19, 2003 was a Saturday, see TEX.R. CIV. P. 4), and the deadline for amending pleadings asserting new causes or defenses was March 24, 2003 (March 22, 2003 was a Saturday). Gravity's November 21, 2003 second amended petition failed to meet the scheduling order's March 24, 2003 deadline. Gravity argues the scheduling order's tying of the deadline for amending pleadings to the discovery deadline should not be followed because "neither the trial court nor Reece uniformly or fairly enforced or interpreted" the discovery deadline in the scheduling order. Gravity cites to motions filed by Reece containing inconsistent arguments concerning what date constituted the end of the discovery period, but Gravity does not cite to any action of the trial court that was inconsistent with the discovery deadline. Gravity also argues the April 21, 2003 discovery deadline should not be enforced by the trial court because the parties did not follow it, citing a letter from Reece's attorneys stating they would turn over the transformers to Gravity's attorneys for testing on November 19, 2003. This letter shows only that the parties voluntarily continued discovery after the discovery period; it does not show inconsistency by the trial court in enforcing the scheduling order. Gravity does not explain and cites no authority showing how the trial court's enforcement of an order disregarded by the parties constitutes an abuse of discretion by the trial court. We conclude Gravity has not adequately briefed this argument. See TEX.R.APP. P. 38.1(h) ("The brief must contain a clear and concise argument for the contentions 544 made, with appropriate citations to authorities and to the record"); Johnson v. Structured Asset Servs., 148 S.W.3d 711, 725 (Tex.App.-Dallas 2004, no pet.). Gravity also argues that the striking of its second amended petition filed ten days before trial is fundamentally unfair because the trial court allowed Reece to file its seconded amended answer and counterclaim the day of trial. Gravity, however, did not move to strike Reece's amended pleading, and the order granting leave to file the pleading states Gravity had advised the court it had no objection to the filing of the pleading. Accordingly, any unfairness from the trial court allowing the late filing of Reece's trial amendment was expressly waived by Gravity. Gravity also cites no authority in support of the proposition that the trial court acted unfairly, so this argument is not properly briefed. TEX.R.APP. P. 38.1(h). Gravity's second amended petition was untimely under the scheduling order, it was facially prejudicial because it asserted new affirmative defenses, and it was objected to by Reece. Accordingly, the decision whether to strike the amended petition was in the sound discretion of the trial court. Kilpatrick, 874 S.W.2d at 658. We conclude the trial court did not abuse its discretion in granting Reece's motion to strike Gravity's second amended petition. We overrule Gravity's second issue. LIMITATIONS In its third issue, Gravity contends the trial court erred in entering judgment for Reece because Reece's claim was barred by limitations. Issues are waived if an appellant fails to support his contention by citations to appropriate authority, or cites only a single non-controlling case. Adams, 154 S.W.3d at 872. Gravity cites no authority in support of this issue, not even the relevant statute of limitations. Accordingly, it has waived this issue. TEX.R.APP. P. 38.1(h); Johnson, 148 S.W.3d at 725. Gravity has also waived its defense. Limitations is an affirmative defense that is waived if not pleaded. Sandford v. Sandford, 732 S.W.2d 449, 450 (Tex.App.-Dallas 1987, no writ); see TEX.R. CIV. P. 94 (listing statute of limitations as an affirmative defense a party "shall set forth affirmatively"). Due to the striking of its second amended petition, it had no pleading asserting the affirmative defense of limitations. Accordingly, this defense is waived. We overrule Gravity's third issue. PAYMENT In its fifth and sixth issues, Gravity asserts it paid for the first 50 transformers, but that Reece obtained judgment against the bank for those transformers and the bank debited Gravity's account for them. Thus, Gravity argues, the trial court should have entered judgment for Gravity for the amount of the first fifty transformers, $1834.50, plus Gravity's attorney's fees. Gravity cites no authority in support of these issues, and its inadequate briefing has waived them. TEX.R.APP. P. 38.1(h); Johnson, 148 S.W.3d at 725. Furthermore, Gravity pleaded no such cause of action, nor did it obtain a jury question on this issue. Accordingly, it has waived this theory of recovery. See Stern v. Wonzer, 846 S.W.2d 939, 945 (Tex.App.-Houston [1st Dist.] 1993, no writ). We overrule Gravity's fifth and sixth issues. LEGAL AND FACTUAL SUFFICIENCY In its seventh issue, Gravity asserts it proved as a matter of law that Reece failed to comply with a warranty; in its eighth issue, Gravity asserts the jury's finding that Reece did not fail to comply 545 with a warranty is against the great weight and preponderance of the evidence. Gravity cites no authority in support of these issues. Accordingly, it has waived them. TEX.R.APP. P. 38.1(h); Johnson, 148 S.W.3d at 725. However, even if we consider Gravity's arguments, we conclude they lack merit. In determining the legal sufficiency of the evidence, we consider all the evidence in the light most favorable to the prevailing party, indulging every reasonable inference in that party's favor. Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285-86 (Tex.1998); see City of Keller v. Wilson, 168 S.W.3d 802, 807 (Tex.2005). We will uphold the finding if more than a scintilla of evidence supports it. Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex.1995); see City of Keller, 168 S.W.3d at 813-14. More than a scintilla of evidence exists where the evidence supporting the finding, as a whole, "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Id. (quoting Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex.1994)). In determining the factual sufficiency of the evidence, we consider and weigh all the evidence. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996). Findings may be overturned only if they are so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. Id. Gravity first asserts Reece failed to comply with a warranty by making "numerous affirmations of fact or promises relating to the transformers, which in fact were not true or were not kept." Gravity, however, fails to specify which "affirmations of fact or promises relating to the transformers" were false or not kept. Without this information, we cannot review this argument. Gravity's briefing of this assertion fails to provide "a clear and concise argument for the contention[] made" as required by rule of appellate procedure 38.1(h), and we conclude Gravity's inadequate briefing has waived this assertion. TEX.R.APP. P. 38.1(h); Natural Gas Clearinghouse v. Midgard Energy Co., 113 S.W.3d 400, 416 (Tex.App.-Amarillo 2003, pet. denied). Gravity next asserts Reece failed to comply with the warranty of fitness for a particular purpose and the warranty that the transformers were fit for their ordinary purpose. Gravity argues it relied on Reece's expertise in choosing transformers, and that Reece's choosing transformers that vent their heat to the ambient air was inappropriate for the design of Gravity's signs because they ran too hot and would melt the plastic components of the sign. Gravity also argued that the high temperature at which the transformers operated made them unsafe and unfit for their ordinary purpose. The evidence was disputed as to how hot the transformers ran. The jury could conclude that Gravity's testimony about the high temperature of the transformers concerned events before Blair showed Gravity how to avoid overloading the transformer. Gravity presented no evidence of signs melting from the heat of the transformers. Jeff Pierce, an employee of both Gravity and Reece at different times, testified that signs using the dimmable transformers did not run too hot. Pierce testified that shortly before the trial, he went to two locations having the signs at issue with Lighting Components' dimmable transformers, and those signs were still safely and properly operating. When he touched the transformers, they were warm but not hot enough to burn him. We conclude Gravity did not prove as a matter of law that Reece failed to comply with the warranty, and the jury's failure to find Reece did not comply with the warranty was not against the 546 great weight and preponderance of the evidence. We overrule Gravity's seventh and eighth issues. GOOD FAITH INSTRUCTION In its ninth issue, Gravity asserts "[t]he trial court erred in refusing to submit good faith instruction/question as requested by Gravity." As Reece noted in its brief, Gravity requested submission of a good faith instruction on jury question 1; Gravity did not request submission of a jury question on good faith. Jury question 1 asked, "Did Reece Supply fail to comply with the Agreement?" The rules of appellate procedure state, "The brief must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record." TEX.R.APP. P. 38.1(h). Gravity's briefing on this issue is inadequate. It states in its brief that it pleaded the cause of action of lack of good faith under the UCC and that it "demonstrated at trial Reece's lack of good faith in dealing with Gravity and its problems with the transformers." Gravity makes no citation to the record to where it demonstrated Reece's lack of good faith or any description of the evidence of Reece's lack of good faith. This Court has no duty to search through the record without guidance from Gravity to determine whether its assertion of reversible error is valid. See Barnett v. N. Tex. Court, Ltd., 123 S.W.3d 804, 817 (Tex.App.-Dallas 2003, pet. denied); Most Worshipful Prince Hall Grand Lodge v. Jackson, 732 S.W.2d 407, 412 (Tex.App.-Dallas 1987, writ ref'd n.r.e.). Gravity's briefing on this issue also includes no argument of why the instruction was necessary to support its cause of action for breach of the agreement, nor any argument of how the instruction's absence harmed Gravity. This Court is not responsible for making Gravity's arguments for it. See Favaloro v. Comm'n for Lawyer Discipline, 13 S.W.3d 831, 839 (Tex.App.-Dallas 2000, no pet.). We conclude this issue is waived for inadequate briefing. We overrule Gravity's ninth issue. REECE'S ATTORNEY'S FEES In its fourth issue, Gravity contends the trial court erred in awarding Reece its attorney's fees because Reece neither sought nor recovered any damages from Gravity on its counterclaim. We review the trial court's decision to award attorney's fees de novo. Gereb v. Smith-Jaye, 70 S.W.3d 272, 273 (Tex.App.-San Antonio 2002, no pet.). In its counterclaim, Reece pleaded Gravity breached the contract. Reece then pleaded its damages as follows: "As a result of Gravity's breach, Reece Supply has incurred actual damages of reasonable and necessary attorneys' fees and costs of litigation in defending this suit. Pursuant to Section 38.001, et seq. of the Texas Civil Practice and Remedies Code, Reece Supply is entitled to recover these attorneys' fees and costs." Reece never counterclaimed for any damages other than its attorney's fees for defending against Gravity's suit. Thus, the sole basis for its claim for attorney's fees under section 38.001 was for successfully defending against Gravity's breach of contract claim. Ordinarily, attorney's fees cannot be recovered as damages. Qwest Commc'ns Int'l, Inc. v. A T & T Corp., 114 S.W.3d 15, 32-33 (Tex.App.-Austin 2003), rev'd in part on other grounds, 167 S.W.3d 324 (Tex.2005) (per curiam). The Austin court, in Qwest Communications, concluded there are two exceptions to this general rule. The first exception applies "where the defendant's tort requires the plaintiff to act in the protection of his interests by bringing or defending an action against a 547 third party, the plaintiff `is entitled to recover compensation for the reasonably necessary loss of time, attorney fees and other expenditures thereby suffered or incurred.'" Id. at 33 (quoting McCall v. Tana Oil & Gas Corp., 82 S.W.3d 337, 344 (Tex.App.-Austin 2001) (quoting RESTATEMENT (SECOND) OF TORTS § 914(2) (1977)), rev'd on other grounds, 104 S.W.3d 80 (Tex.2003)). This exception does not apply because, although Reece had to bring suit against a third party, the bank, Reece was awarded judgment for its costs and attorney's fees, and the bank paid the judgment. The second exception listed by the Austin court "permits recovery of damages measured by attorney's fees when the defendant `has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'" Id. (quoting McCall, 82 S.W.3d at 345 (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 258-59, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975))). However, the supreme court's opinion reversing McCall indicates that recovery of attorney's fees for these reasons should be pursued under rule of civil procedure 13, not as actual damages. See Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 83 (Tex.2003). Regardless, Reece did not seek attorney's fees on this ground, and it did not plead or prove Gravity acted in bad faith, vexatiously, wantonly, or for oppressive reasons. Accordingly, we conclude Reece is not entitled to attorney's fees as damages. Other than the exceptions noted above, a party cannot recover attorney's fees unless permitted by statute or contract. Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex.1999). A party who prevails on a breach of contract claim is entitled to recover attorney's fees for prosecution of the claim as provided by section 38.001(8) of the civil practice and remedies code: "A person may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for: ... (8) an oral or written contract." TEX. CIV. PRAC. & REM.CODE ANN. § 38.001 (Vernon 1997). Recovery of damages on a claim has always been an element of a recovery of attorney's fees under section 38.001 and its predecessor statutes, articles 2178 and 2226 of the revised civil statutes. In 1909, the legislature passed article 2178, which, for claims now listed in section 38.001(1)-(6),[3] provided for reasonable attorney's fees[4] if the plaintiff presented his claim to 548 the alleged debtor and did "finally establish his claim, and obtain judgment for the full amount thereof, as presented for payment." Act approved Mar. 13, 1909, 31st Leg., R.S., ch. 47, § 1, 1909 Tex. Gen. Laws 93, 93-94. In 1923, article 2178 was renumbered to article 2226, but its terms remained substantively unchanged, continuing to require the plaintiff to "obtain judgment for the full amount thereof." Act approved Mar. 26, 1923, 38th Leg., R.S., ch. 144, § 1, 1923 Tex. Gen. Laws 312, 312. In 1949, the legislature amended the requirement of obtaining "judgment for the full amount thereof" to obtaining "judgment for any amount thereof." Act of June 21, 1949, 51st Leg., R.S., ch. 494, § 1, 1949 Tex. Gen. Laws 915, 915. The 1977 amendment added "suits founded on oral or written contracts" to the list of claims entitling a party to attorney's fees. The 1977 amendment removed the language requiring "judgment for any amount thereof." Act of Apr. 7, 1977, 65th Leg., R.S., ch. 76, § 1, 1977 Tex. Gen. Laws 153, 153. The amended act stated, as had the earlier versions, that the claimant had to present his claim to the alleged debtor, and if the claim "for the just amount owing" was not tendered within thirty days, "the claimant may, if represented by an attorney, also recover, in addition to his claim and costs, a reasonable amount as attorney's fees." Id. The supreme court interpreted this change in article 2226 to mean that a claimant did not need to have a net recovery to be entitled to attorney's fees; instead, he had to prove "the just amount owing." McKinley v. Drozd, 685 S.W.2d 7, 10-11 (Tex.1985) (even though claimant's breach-of-contract recovery was entirely offset by opponent's counterclaims, claimant was entitled to attorney's fees under article 2226). In 1985, the statute was codified into its present form. Section 38.002 requires presentation of the claim and the failure of the opposing party to tender "payment for the just amount owed." TEX. CIV. PRAC. & REM.CODE ANN. § 38.002 (Vernon 1997). If the prerequisites of section 38.002 are met, and the claim is one for which attorney's fees may be awarded, then the claimant "may recover reasonable attorney's fees... in addition to the amount of a valid claim and costs." Id. § 38.001 (emphasis added). The language of the statute requires that the claimant must recover an "amount of a valid claim." As the supreme court has made clear, section 38.001 requires recovery of damages for a claimant to be eligible to recover attorney's fees. In 1995, and again in 1997, the supreme court stated that for a party to recover attorney's fees under section 38.001, "a party must (1) prevail on a cause of action for which attorney's fees are recoverable, and (2) recover damages." Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex.1997) (quoting State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 437 (Tex.1995)); see also Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex.2004) (per curiam) ("it was not entitled to recover attorney's fees because it was not awarded damages on its breach of contract claim"); Rodgers v. RAB Inv., Ltd., 816 S.W.2d 543, 551 (Tex.App.-Dallas 1991, no writ) ("Without a jury finding of damages or a recovery of money, there can be no award of attorney's fees."). Section 38.001 does not provide for attorney's fees for a party's successful defense against a claim. Wilson & Wilson Tax Servs. v. Mohammed, 131 S.W.3d 231, 240 (Tex.App.-Houston [14th Dist.] 2004, no pet.); Melson v. Stemma Exploration & Prod. Co., 801 549 S.W.2d 601, 604 (Tex.App.-Dallas 1990, no writ). Reece argues, however, that a party can recover its attorney's fees under section 38.001 even though it did not recover damages. In its brief, Reece discusses three cases in which the courts of appeals held that parties could recover attorney's fees under section 38.001 even though they were awarded no damages. See Atlantic Richfield Co. v. Long Trusts, 860 S.W.2d 439 (Tex.App.-Texarkana 1993, writ denied); De La Rosa v. Kaples, 812 S.W.2d 432 (Tex.App.-San Antonio 1991, writ denied); Martini v. Tatum, 776 S.W.2d 666 (Tex.App.-Amarillo 1989, writ denied). In Atlantic Richfield Co., ARCO was the operator of gas wells for the Trusts. Atlantic Richfield Co., 860 S.W.2d at 442. The operating agreement required the Trusts to contribute to the operating expenses. The agreement provided for payment of attorney's fees in the event of untimely non-payment. The Trusts breached this agreement, ARCO sued the Trusts for breach of the operating agreement, and the Trusts sued ARCO, claiming in part they were overcharged. Id. at 450. While suit was pending, ARCO mitigated its damages by recouping some of the unpaid operating expenses by selling some of the Trusts' share of the gas. Id. At trial, the jury found the Trusts breached the operating agreement by failing to pay ARCO in accordance with the agreements, but the jury awarded ARCO "zero" damages. On appeal, ARCO complained the trial court erred by failing to disregard the jury finding of zero damages and by failing to award ARCO its attorney's fees. Id. at 442, 449. Reliance upon the Atlantic Richfield decision is problematic. ARCO's point of error on appeal challenging the jury's zero damages finding actually focused on its entitlement to attorney's fees, not its entitlement to damages. Id. at 450 n. 14. Even ARCO's motion to disregard and his later argument on appeal that the trial court erred in failing to disregard the jury finding of zero damages was not availing. Id. If the jury finding had been set aside, no finding on damages would have remained, and ARCO would have had to take the untenable position that its damages were established as a matter of law. Id. Applying the principle that "[w]hen a party prevails and establishes a valid claim, the party can be entitled to attorney's fees without achieving a monetary recovery on the claim itself," the court held ARCO was entitled to attorney's fees based upon the litigation of the portion of the suit dealing with drilling costs. Id. at 450. Martini concerned a dispute between a buyer and a seller of real property to earnest money held in escrow after the buyer failed to close timely. Martini, 776 S.W.2d at 667-68. The seller refused to release the earnest money to the buyer, and they sued each other for a variety of claims including breach of contract. Id. at 668. After suit was filed, but before trial, the seller agreed to release the earnest money to the buyer in partial settlement of the buyer's claim for interest on the earnest money. Id. at 668, 670. At trial, the jury found the buyer breached the earnest money contract and the seller did not breach the contract, and the jury determined the amount of the seller's reasonable and necessary attorney's fees. Id. at 668. Although substantial evidence showed the seller was damaged by the buyer's breach of contract, no issue inquiring of the seller's actual damages was submitted to the jury. The parties, however, agreed that the answer to special issue number 3 (wherein the jury affirmatively found the buyer breached his earnest money contract with the seller) constituted a correct 550 submission of seller's claim to the five thousand dollars earnest money, and the jury's answer as a finding of the seller's valid claim to the funds. The court concluded the seller established a valid claim under section 38.001 and was entitled to recover reasonable attorney's fees, although the seller "did not achieve a monetary recovery on the claim itself." Id. at 670. In De La Rosa, the buyers of real property paid the seller a down payment of $15,000 and took possession of the property pursuant to the agreement. De La Rosa, 812 S.W.2d at 433. The buyers soon changed their minds, returned the property, and demanded the return of the $15,000 down payment. Id. The seller refused to return the down payment. The buyers sued for breach of oral contract claiming the $15,000 down payment, or, alternatively, for rescission of contract. Id. The seller responded with a general denial, and a claim for damages for breach of the same contract, for groundless suit brought in bad faith, and for attorney's fees both for defending and prosecuting the claim under the contract. Id. The buyers (appellants) failed to present a statement of facts on appeal. Id. The jury found the contract did not entitle the buyers to the return of the down payment if they were dissatisfied with the purchase, the seller suffered no damages from the buyers' failure to purchase the property, and the seller's reasonable and necessary attorney's fees were $4000. Id. On appeal, the buyers argued the seller did not prevail on a valid or just claim and therefore was not entitled to attorney's fees under section 38.001 because the jury found that the seller suffered no damages from the buyers' breach. Id. at 434. The court of appeals, however, concluded the seller had prevailed because "the jury implicitly sustained the claim of the [seller] to the $15,000 by its answers." Id. at 435. Thus, the seller prevailed and was entitled to attorney's fees because the jury found the seller was entitled to property it claimed in its breach of contract suit. Id. After the courts of appeals decided these cases, the Texas Supreme Court issued cases holding that a party who does not recover damages cannot recover attorney's fees under section 38.001(8). In Green International, Inc., the jury found the defendant breached the contract, but it awarded the plaintiff no damages. Green Int'l, Inc., 951 S.W.2d at 386. In the supreme court, the plaintiff argued it was entitled to attorney's fees because the jury found in its favor on its breach of contract claim. Id. at 390. The supreme court held that even though the jury found the defendant breached the contract, the plaintiff could not recover attorney's fees under section 38.001(8) because it "failed to recover damages on its breach of contract claim." Id. In Mustang Pipeline Co., Mustang hired Driver to build a section of a pipeline. Mustang Pipeline Co., 134 S.W.3d at 196. When Driver breached the contract, Mustang terminated Driver and had to hire another company to complete Driver's portion of the pipeline. Id. at 197. Mustang sued Driver for breach of contract and alleged as damages the cost of completion and lost profits, and Mustang sought its attorney's fees. The jury found Driver breached the contract, and it awarded Mustang over $2 million in damages for Driver's breach of contract. Id. On Driver's motion for judgment notwithstanding the verdict, the trial court set aside the award of damages, and it did not award Mustang attorney's fees. Id. The trial court denied Driver's motion to set aside the jury finding that Driver breached the contract. Id. The supreme court determined the trial court was correct to set aside the damages award because Mustang 551 failed to provide evidence that its out-of-pocket costs were reasonable. Id. at 201. On the question of Mustang's right to recover attorney's fees under section 38.001, the court stated, "While Mustang did have a valid claim against Driver, it was not entitled to recover attorney's fees because it was not awarded damages on its breach of contract claim." Id. Like the parties in the cases cited by Reece, Mustang proved Driver breached the contract. However, the supreme court held that because there was no award of damages, Mustang could not recover its attorney's fees. To the extent Atlantic Richfield Co., Martini, and De La Rosa are inconsistent with the supreme court's pronouncements in Mustang Pipeline Co. and Green International, Inc., we decline to follow them. Following the supreme court's opinions in Mustang Pipeline Co. and Green International, Inc., we conclude the trial court erred in determining Reece was entitled to attorney's fees under section 38.001. Reece also argues it is entitled to attorney's fees for defending against Gravity's breach of contract action based on the following language from De La Rosa: "[T]here is an exception to the general rule of law [that attorney's fees are not recoverable for the defense of a breach-of-contract-claim] for cases in which the matters encompassed by the claim and counterclaim are indistinguishable, where they arose from the same transactions, where the same facts required to prosecute the claim are required to defend against the counterclaim"; under these circumstances attorney's fees are appropriate. De La Rosa, 812 S.W.2d at 434 (quoting Veale v. Rose, 657 S.W.2d 834, 841 (Tex.App.-Corpus Christi 1983, writ ref'd n.r.e.)). The quoted language must be considered within the context of its source, Veale. In Veale, plaintiffs and defendants sued one another for breach of contract arising out of the same facts. Veale, 657 S.W.2d at 836. The plaintiffs prevailed on their breach of contract claim, and in proving attorney's fees, did not segregate the fees related to prosecution of their claim from the fees related to defense of the defendants' claim. Id. at 841. Defendants argued the attorney's fees award was unlawful because a party cannot recover attorney's fees for the pure defense of a claim. Id. The court of appeals set out the above-quoted language and concluded that because the claim and counterclaim were interrelated, segregation was unnecessary and the award of attorney's fees for both prosecution of the claim and defense of the counterclaim was proper. Id. Thus, the language on which Reece relies permits recovery of attorney's fees for defense of a claim when (1) a party is entitled to attorney's fees for the prosecution of a claim and (2) the claim and counterclaim are so interrelated that segregation of fees incurred in prosecution of the claim and defense of the counterclaim is not necessary. Id. In the case before us, Reece failed to show it was entitled to attorney's fees for prosecution of its claim, so the exception permitting recovery of attorney's fees for defense of an interrelated counterclaim does not apply. We hold Reece is not entitled to attorney's fees. We sustain Gravity's fourth issue. Because of our disposition of this issue, we need not reach Gravity's first issue asserting Reece lacked standing to bring its breach of contract claim. We reverse the trial court's judgment in part and render judgment that Reece take nothing in its suit against Gravity, and we otherwise affirm the trial court's judgment. NOTES [1] The amended pleadings portion of the scheduling order stated, Any amended pleadings asserting new causes of action or affirmative defenses must be filed no later than thirty (30) days before the end of the discovery period and any other amended pleadings must be filed no later than seven days after the end of the discovery period. Amended pleadings responsive to timely filed pleadings under this schedule may be filed after the deadline for amended pleadings if filed within two (2) weeks after the pleading to which they respond. [2] The trial court reset the trial date several times with the final trial setting for December 1, 2003. However, these resettings did not affect the discovery period or the deadline for amending pleadings because the order also provided, "Reset or continuance of the Initial Trial Setting [May 19, 2003] will not alter any deadlines established in this Order or established by the Texas Rules of Civil Procedure, unless otherwise provided by order." In this case, the record does not show the trial court entered any order altering the discovery period or the deadline for filing amended pleadings. [3] Under the earlier versions of the statute, i.e., before 1977, a party could not recover attorney's fees on a claim for breach of contract unless the contract concerned one of the listed claims: personal services rendered, labor done, material furnished, overcharges for freight or express, lost or damaged freight or express, or stock killed or injured, and, after the 1953 amendment, suits on sworn accounts. The supreme court limited the suit on sworn accounts provision to suits between persons for the purchase and sale of personal property creating a debtor-creditor relationship. Meaders v. Biskamp, 159 Tex. 79, 82-83, 316 S.W.2d 75, 78 (1958). Claims on "special contracts," not falling within this definition of sworn account, were not entitled to attorney's fees until the 1977 amendments. See id., 159 Tex. at 83, 316 S.W.2d at 78 (attorney's fees not recoverable under article 2226 for contract to drill oil well); Guay v. Schneider, Bernet & Hickman, Inc., 341 S.W.2d 461, 462 (Tex.Civ.App.-Waco 1960) (attorney's fees not recoverable in suit by stock broker against account holder for amounts owing from margin transaction), writ ref'd n.r.e., 161 Tex. 560, 344 S.W.2d 429 (1961) (per curiam). [4] Between 1909 and 1949, articles 2178 and 2226 limited the "reasonable amount as attorney's fees" to twenty dollars. The 1949 amendment to article 2226 removed this cap. Compare Act approved Mar. 13, 1909, 31st Leg., R.S., ch. 47, § 1, 1909 Tex. Gen. Laws 93, 93-94 and Act approved Mar. 26, 1923, 38th Leg., R.S., ch. 144, § 1, 1923 Tex. Gen. Laws 312, 312 with Act of June 21, 1949, 51st Leg., R.S., ch. 494, § 1, 1949 Tex. Gen. Laws 915, 915.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1874261/	318 B.R. 527 (2004) In re WESTERN ASBESTOS COMPANY, et al., Reorganized Debtors. No. 02-46284 T, No. 02-46285 T, No. 02-46286 T. United States Bankruptcy Court, N.D. California. November 5, 2004. 528 Charles D. Axelrod, Alan D. Pedlar, Stutman, Treister and Glatt, Los Angeles, CA, for Debtor. MEMORANDUM OF DECISION LESLIE TCHAIKOVSKY, Bankruptcy Judge. The application of Baron & Budd, P.C. ("Baron & Budd") for payment of attorneys' fees and expenses under 11 U.S.C. § 503(b) was presented to the Court on October 26, 2004. A timely objection to the application was filed by the Honorable Charles Renfrew, the Futures Representative (the "Futures Representative"). Thereafter, the Trust Advisory Committee and the Western Asbestos Settlement Trust filed joinders in the Futures Representative's objection. At the conclusion of the hearing, the Court advised the parties that it would take under submission the threshold legal issue presented by the application: i.e., whether an attorney may obtain an administrative claim for fees and expenses for its creditor client's substantial contribution to a chapter 11 case when its creditor client has no obligation to pay those fees and expenses. Having considered the issue, the Court concludes that an attorney may obtain an administrative claim under these circumstances. The reasons for the Court's decision are set forth below.[1] SUMMARY OF FACTS These administratively consolidated cases were filed on November 22, 2002. The debtors (the "Debtors") are MacArthur Co., Western MacArthur Co., and Western Asbestos. MacArthur Co. is the parent of Western MacArthur Co. Western Asbestos is a defunct company whose assets were acquired by Western MacArthur. All three entities were at one time distributors and installers of building materials containing asbestos. As a result, all three entities and their insurance companies were actual and/or potential defendants in lawsuits filed by individuals exposed to asbestos who have either developed a disease as a result of their exposure or fear that they will do so in the future. The Debtors were engaged in coverage litigation with United States Fidelity and Guaranty Company ("USF & G"), one of their insurers, for approximately ten years. During this litigation, the Debtors entered into "stand still" agreements with many of the asbestos claimants. Some of these claimants obtained default judgments or stipulated judgments. However, they agreed not to attempt to enforce them against the Debtors unless the Debtors filed bankruptcy petitions. The claimants recognized that, given the Debtors' limited assets, as compared to the amount of the asbestos related claims, any meaningful recovery depended on the successful resolution of the coverage litigation. The year before the bankruptcy cases were filed, the Debtors reached a settlement with USF & G. The settlement required the Debtors to file chapter 11 petitions 529 and obtain confirmation of a plan that provided USF & G with an injunction protecting it from any further liability for asbestos related claims against the Debtors. See 11 U.S.C. § 524(g). A committee of asbestos claimants with liquidated claims and the Honorable Charles Renfrew, who was later appointed by the Court as the Futures Representative, participated in the settlement negotiations. A plan and disclosure statement were filed soon after the chapter 11 petitions were filed. The plan proponents sought approval of the disclosure statement and confirmation of the plan. Law firms representing claimants with unliquidated asbestos claims, who were not involved in the pre-filing negotiations, filed objections to the disclosure statement and to various applications filed by the plan proponents seeking court approval of the procedures governing the plan confirmation process. The disclosure statement and procedures were modified to some extent based on those objections. Some of the objections were overruled and did not result in any modification. Ultimately, the plan was confirmed. On June 18, 2004, a document entitled Application of Certain Claimants Represented by Baron & Budd, P.C. for Payment of Attorney Fees and Expenses under 11 U.S.C. § 503(b)(3)(D) (the "Application") was filed. The Application sought an administrative claim totaling $338,024.45 for attorneys' fees and expenses incurred by the Law Firms of Stutzman, Bromberg, Esserman & Plifka and Wendel, Rosen, Black & Dean LLP (collectively the "Stutzman Firm"), co-counsel with Baron & Budd for the certain asbestos claimants with unliquidated claims. In one of the objections to the Application, the point was made that, since counsel for these asbestos claimants presumably had contingent fee agreements with their clients and since it was the clients who were the creditors, not the law firms, neither the Stutzman Firm nor Baron & Budd were entitled to an administrative claim under 11 U.S.C. § 503(b)(3)(D) regardless of whether their clients had made a substantial contribution to the case. At the hearing on the Application, the Court asked Sander Esserman ("Esserman"), a shareholder at the Stutzman Firm, to explain the financial arrangements between the Stuzman Firm, Baron & Budd, and the asbestos claimants with unliquidated claims. Esserman explained that, while the Stuzman Firm represented the asbestos claimants, they were hired and paid by Baron & Budd. Moreover, Baron & Budd did not claim the right to seek reimbursement for those payments from its asbestos claimant clients. At the conclusion of the hearing, the Court took under submission the issue of whether an administrative claim was allowable under these circumstances. DISCUSSION The Application seeks allowance of an administrative claim pursuant to 11 U.S.C. § 503(b)(3)(D) for making a substantial contribution. Section 11 U.S.C. § 503(b)(3)(D) provides as follows: (b) After notice and a hearing, there shall be allowed, administrative expenses . . . including . . . (3) the actual, necessary expenses, other than compensation and reimbursement specified in paragraph (4) of this subsection, incurred by . . . (D) a creditor, an indenture trustee, an equity security holder, or committee representing creditors or equity security holders other than a committee appointed under section 1102 of this title, in making a substantial contribution 530 in a case under chapter 9 or 11 of this title; 11 U.S.C. § 503(b)(3)(D)(emphasis added). Baron & Budd has no right to an administrative claim for the Stutzman Firm's attorneys' fees and expenses pursuant to 11 U.S.C. § 503(b)(3)(D) for two reasons. First, 11 U.S.C. § 503(b)(3)(D) permits an administrative claim only for actual expenses incurred by a creditor. As discussed above, the asbestos claimants are the creditors, not Baron & Budd or the Stutzman Firm. The asbestos claimants did not incur any obligation to pay the Stutzman Firm's fees and expenses. Second, attorneys' fees and expenses are expressly excluded from 11 U.S.C. § 503(b)(3). Baron & Budd should have based the Application on 11 U.S.C. § 503(b)(4). The Court will analyze the issue as if it had done so. Section 503(b)(4) provides that: (b) After notice and a hearing, there shall be allowed, administrative expenses . . . including . . . (4) reasonable compensation for professional services rendered by an attorney or an accountant of an entity whose expense is allowable under paragraph (3) of this subsection, based on the time, the nature, the extent, and the value of such services, and the cost of comparable services other than in a case under this title, and reimbursement for actual, necessary expenses incurred by such attorney or accountant;. . . . 11 U.S.C. § 503(b)(4). Section 503(b)(4) does not require that the attorneys' fees and expenses that form the basis for the administrative claim be incurred by the creditor. It simply requires that the attorney whose fees and expenses form the basis for the administrative claim represent the creditor who made a substantial contribution. Nevertheless, at the hearing on the Application, the Futures Representative argued that the plain language of 11 U.S.C. § 503(b) requires the creditor to have incurred an obligation for the attorneys' fees and expenses. He based this argument on the use of the phrase "incurred by" in 11 U.S.C. § 503(b)(3). As the Court understands his reasoning, the attorneys' fees and expenses allowed by 11 U.S.C. § 503(b)(4) are not broader than the attorneys' fees excluded from the expenses allowed under 11 U.S.C. § 503(b)(3)(D). Because the expenses allowed under 11 U.S.C. § 503(b)(3)(D) must have been actually incurred by a creditor, the excluded attorneys' fees and expenses must also have been actually incurred by a creditor. The Court finds this reading of 11 U.S.C. §§ 503(b)(3)(D) and 503(b)(4) to be strained. A more natural reading is that 11 U.S.C. § 503(b)(3)(D) permits an administrative claim for expenses other than attorneys' fees and expenses that are actually incurred by a creditor who made a substantial contribution. Section 11 U.S.C. § 503(b)(4) permits an administrative claim for attorneys' fees and expenses of an attorney who represents a creditor who made a substantial contribution regardless of whether the fees and expenses were incurred by the creditor. There is little or no case authority on this issue. The dicta contained in a few cases most notably, in In re Sedona Institute, 220 B.R. 74 (9th Cir. BAP 1998) supports the Futures Representatives' position. In Sedona Institute, the bankruptcy appellate panel reversed and remanded an order denying a law firm's administrative expense claim for making a substantial contribution. The trial court had not addressed the substantial contribution issue, having concluded that, to obtain an administrative 531 expense claim for attorneys' fees and expenses under 11 U.S.C. § 503(b)(4), the creditor must have incurred expenses allowable under 11 U.S.C. § 503(b)(3)(D): i.e., other than attorneys' fees and expenses. The bankruptcy appellate panel disagreed. On remand, the bankruptcy appellate panel directed the trial court to consider whether the creditor had made a substantial contribution. It also directed the court to consider whether the creditor had any obligation to pay the attorneys' fees and expenses. On this latter point, it stated as follows: A primary objective of § 503(b)(3)(D) is to encourage creditor participation. . . . The policy is achieved by offering to reimburse those creditors who make substantial contributions. If the creditor is not liable for the fees in the first place, then the purpose of the statute is not served by the estate assuming the obligation. Sedona Institute, 220 B.R. at 81. See also 4 Collier on Bankruptcy § 503.11[4] (15th ed. rev.2003), citing In re Glickman, Berkowitz, Levinson & Weiner, P.C., 196 B.R. 291, 295, n. 3 (Bankr.E.D.Pa.1996) and In re Oxford Homes, Inc., 204 B.R. 264, 267-68 (Bankr.D.Me.1997). However, none of these courts looked closely at the wording of statute. The Court disagrees with the dicta quoted above that policy reasons militate against allowing an administrative claim under these circumstances. As noted in Sedona Institute in the quotation above, the purpose of 11 U.S.C. § 503(b)(3)(D) and (4) is to encourage creditor participation in chapter 11 cases. See also In re Celotex, 227 F.3d 1336, 1338-39 (11th Cir.2000). Creditors generally participate in chapter 11 cases through attorneys. If the creditor makes a substantial contribution to a chapter 11 case, why should it make a difference from a policy standpoint whether the creditor is obligated to pay the attorneys' fees and expenses? The requirement that the attorney represent a creditor who made a substantial contribution protects the estate from the assertion of a claim by an attorney with no connection to the case. Finally, read thus, 11 U.S.C. § 503(b)(4) is not unique. Courts have construed other statutes less susceptible to such an interpretation to permit recovery of attorneys' fees even when the client was not obligated to pay them. For example, in Blanchard v. Bergeron, 489 U.S. 87, 109 S. Ct. 939, 103 L. Ed. 2d 67 (1989), a civil rights case, the Supreme Court reversed the court of appeals' reduction of the trial court's fee award to the plaintiff to the amount that would have been due under his contingent fee agreement. It cited with approval Davis v. County of Los Angeles, 8 E.P.D. ¶ 9444, 1974 WL 180 (C.D.Cal.1974), approving "a fee award to counsel in a public interest firm which otherwise would have been entitled to no fee." Blanchard, 489 U.S. at 93, 109 S. Ct. 939. Similarly, In Kessler v. Associates Financial Services Company of Hawaii, Inc., 639 F.2d 498, 499 (9th Cir.1981), the Ninth Circuit affirmed the award of attorneys' fees to a Truth in Lending Act plaintiff under 15 U.S.C. § 1640(a)(3) despite the fact that the plaintiff had been represented without charge by a legal services organization. In both instances, the language of the relevant statute was less susceptible to this construction than 11 U.S.C. § 503(b)(4). CONCLUSION For the reasons stated above, the Court concludes that a law firm that represents a creditor who has made a substantial contribution in a chapter 11 case may obtain *532 an administrative claim for its reasonable fees and expenses under 11 U.S.C. § 503(b)(4) even though the creditor was not obligated to pay and has not paid those fees and expenses. NOTES [1] As the Court noted at the hearing, the format of the application was insufficiently detailed to permit the Court to make a determination of the appropriate amount of any award. The Court agreed that, if it determined that an administrative claim could be allowed under these circumstances, it would give Baron & Budd leave to supplement its application to supply the missing information. The Court will provide this information to Baron & Budd by separate order separate from this memorandum.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1656048/	935 So. 2d 393 (2006) Susan R. MOSS, Tracy M. Nichols, Kenny R. Moss and Rory A. Garcia v. BATESVILLE CASKET COMPANY, INC. and Ott & Lee Funeral Home. No. 2005-CA-00372-SCT. Supreme Court of Mississippi. July 27, 2006. 395 T. Jackson Lyons, Jackson, Evelyn Tatum Portie, Brandon, attorneys for appellants. George Martin Street, Jr., James D. Holland, Jackson, J. Wade Sweat, Ridgeland, Marisa Campbell Atkinson, Clarksdale, attorneys for appellees. Before WALLER, P.J., EASLEY and GRAVES, JJ. EASLEY, Justice, for the Court. PROCEDURAL HISTORY ¶ 1. Susan R. Moss, Tracy M. Nichols, Kenny R. Moss, and Rory A. Garcia (collectively, the "Plaintiffs") originally filed suit on December 7, 2001, against Ott & Lee Funeral Home (Ott & Lee) and Batesville Casket Company, Inc., (Batesville) (collectively, the "Defendants") alleging claims of breach of implied warranty of merchantability, breach of implied warranty of fitness, strict products liability, negligence, tortious interference with a dead body, intentional infliction of emotional distress, fraud, negligent misrepresentation, and punitive damages. Both Ott & Lee and Batesville timely responded to the complaint by filing general and specific denials and asserting affirmative defenses. ¶ 2. After a period of discovery, including written requests for discovery and depositions, had occurred, both Ott & Lee and Batesville filed motions for summary judgment in November 2002, asserting that they were entitled to judgment as a matter of law based on the lack of evidence supporting the Plaintiffs' claims. The Plaintiffs filed a joint response to the Defendants' motions for summary judgment. ¶ 3. On October 4, 2004, the Plaintiffs filed their first amended complaint. Ott & Lee answered the amended complaint on October 20, 2004, and Batesville answered on October 26, 2004. Again, the Defendants responded to the complaint with general and specific denials and asserted affirmative defenses. Subsequently, the Plaintiffs on October 27, 2004, filed their supplemental response to the Defendants' motions for summary judgment. ¶ 4. On December 28, 2004, the trial court found no genuine issues of material fact existed and issued two separate orders granting each of the Defendants' motions for summary judgment as a matter of law in separate opinions. The Plaintiffs filed a motion for reconsideration; both Defendants responded to the motion for reconsideration. The trial court denied the motion for reconsideration on February 14, 2005. ¶ 5. The Plaintiffs raised confusion with the trial court regarding whether the two orders were final judgments because the orders failed to state "final judgment." The Plaintiffs continued to submit additional evidence and requested additional findings. Accordingly, the trial court designated the two orders granting summary judgment as "final judgments," and the trial court granted the Plaintiffs an extension of time in which to file their notice of appeal. The Plaintiffs now appeal to this Court. FACTS ¶ 6. On March 7, 1999, Nancy Moss Minton, the Plaintiffs' mother, died.[1] The Plaintiffs engaged Ott & Lee in Morton, Mississippi, as the funeral home to handle the burial services. From the models on Ott & Lee's showroom floor, they selected a Pembroke cherry wood casket manufactured 396 by Batesville. According to the Plaintiffs, the cherry wood casket "looked like" their mother and "suited her" because all the furniture in her home was cherry wood. Based on all the Plaintiffs' depositions in the record, the choice of a cherry casket was made for purely aesthetic reasons because it looked like their mother and their mother was very fond of that type of wood. The Plaintiffs contend that they were told by Ott & Lee that the casket was "top of the line." ¶ 7. At the time the wooden casket was selected, the employees of Ott & Lee informed the Plaintiffs that a wooden casket could not be sealed like a metal casket. The Plaintiffs testified in their depositions that Ott & Lee's employee, Ray Pardue, informed them that the wooden casket would not seal. The Plaintiffs admit Ott & Lee suggested that a concrete vault be used with a wooden casket, and they elected to use a concrete vault. According to the Plaintiffs, Ott & Lee told them the vault would keep the pressure of the dirt off the casket and prevent water from reaching the casket. Ott & Lee made no misrepresentations to the Plaintiffs about the ability of a wooden casket to preserve the remains, and the Plaintiffs admit that they did not inquire about its ability to preserve the remains. In fact, Susan Moss, one of the Plaintiffs, testified in her deposition that she was aware that a wooden casket could not seal, but she still chose a wooden casket for her mother's remains. According to the Defendants, the Plaintiffs did not request any other information regarding wooden caskets, request any particular characteristics in a casket, or discuss what they wanted from a casket regarding protection of the remains. Kenny Moss testified that he did not recall anyone asking Pardue for any recommendation as to which casket they should choose. Kenny further testified that he did not recall Pardue ever stating which casket was better or which one they should buy. ¶ 8. The wooden casket had a written warranty from Batesville that expressly disclaimed any implied warranties and limited liability as to replacement of the casket. Batesville's warranty for a hardwood casket, that it provided to the funeral director and the funeral director's client, only warranted the hardwood casket until the time of interment. ¶ 9. The full pre-interment warranty certificate for a Batesville hardwood casket stated: That this Batesville Hardwood Casket is manufactured from solid hardwoods, and is free from defects in materials and workmanship. If, at any time prior to the interment of this casket in an initial place of interment, it is found to be defective in materials or workmanship, Batesville will, within ten days after notice to it, replace this casket with one of similar quality provided it was properly handled in the funeral director's possession and an opportunity is afforded for examination of the casket by Batesville representatives and/or impartial experts designated by them. Batesville employees or representatives are not authorized to change this warranty in any way or grant any other warranty. Batesville shall not be responsible for any consequential damages arising out of any breach of this express warranty or any implied warranties. Some states do not allow the exclusion of limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you. The purchaser's remedy shall be strictly limited to replacement of the casket as stated in the preceding paragraph. 397 ¶ 10. The Plaintiffs' mother was buried on March 9, 1999. Later believing that a medical malpractice claim may have existed against the decedent's medical care providers, the Plaintiffs had the decedent's body exhumed for an autopsy. Accordingly, approximately two and one-half years after the burial, the Plaintiffs had their mother's body exhumed on August 10, 2001, to investigate a possible medical malpractice claim.[2] However, the autopsy revealed that the Plaintiffs' mother died of natural causes, not medical malpractice. When the casket was exhumed, the Plaintiffs observed visible cracks and separation in the casket. As the casket was removed, it began to dismantle. The body remained in the casket, and none of the Plaintiffs saw the body. Only Susan Moss and Kenny Moss were present at the exhumation. ¶ 11. The record does not reveal any evidence showing any damage to the body linked to the separation and cracks in the casket at issue, and the Plaintiffs admitted that they did not have any evidence that the body was not properly preserved. Furthermore, without admitting any liability or obligation and clearly stating so in a letter to the Plaintiffs' counsel, Batesville furnished a metal casket free of charge to the Plaintiffs for the reburial. ¶ 12. The Plaintiffs did not present the trial court with any expert with any specialized knowledge related to caskets. However, Dr. Ramsay Smith's report and evaluation dated May 31, 2004, were supplied at the motion for summary judgment and considered by the trial court in its ruling. Dr. Smith, a forest products consultant with the Louisiana Forest Products Development Center at Louisiana State University, purported to be an expert in wood rot, decay, and degradation. Dr. Smith did not find any problem with the physical and/or mechanical properties of the wood. He stated that decay is a natural process in wood, but that wood is a proper material to use to manufacture a casket. He determined that the casket had separated at the glued joints based on poor adhesive bonds where the cherry wood boards had been glued together to form the casket. ¶ 13. However, Dr. Smith testified in his deposition that he did not hold himself out as an expert in the field of adhesives. Dr. Smith's report and deposition were both considered by the trial court in ruling on the motion for summary judgment. Based on Dr. Smith's testimony, the trial court gave no weight to Dr. Smith's findings as to the adhesive or glue bonds. The trial court further stated that "the heart of Dr. Smith's report laid the fault at the glue-line failures, a field which was not in the area of his expertise." ¶ 14. Dr. Moon Kim, a professor at Mississippi State University in the Department of Forest Products and Forest Products Laboratory, purported to be an expert in wood and glue. Dr. Kim's affidavit provided that the glue used in the casket was improper, and as a result, it did not provide an effective bond for the joints. However, Dr. Kim's affidavit was not offered to the trial court for consideration in rendering its decision on the motion for summary judgment. Dr. Kim's affidavit appeared for the first time as an attachment to the Plaintiffs' motion for reconsideration. The trial court denied the motion for reconsideration without any reference to the new report from Dr. Kim. The trial court specifically addressed the Plaintiffs' counts of breach of implied warranty for 398 fitness, particular purpose; breach of implied warranty for merchantability, ordinary purpose; strict products liability; and negligence. The trial court did not specifically address the remaining counts, finding that the warranty counts were dispositive of the remaining counts. The trial court granted summary judgment in favor of the Defendants, and subsequently denied the Plaintiffs' motion for reconsideration. On appeal, the Plaintiffs raises the following issues: I. Whether the trial court erred in granting summary judgment to the Defendants on the count of breach of an implied warranty of fitness for a particular purpose. II. Whether the trial court erred in granting summary judgment to the Defendants on the count of breach of an implied warranty of merchantability for an ordinary purpose. III. Whether the trial court erred in granting summary judgment to the Defendants on the products liability count under Miss.Code Ann. § 11-1-63. IV. Whether the trial court erred in granting summary judgment to the Defendants on the negligence counts. DISCUSSION ¶ 15. This Court applies a de novo standard of review to the trial court's grant of summary judgment. Stuckey v. Provident Bank, 912 So. 2d 859, 864 (Miss. 2005). See also Jenkins v. Ohio Cas. Ins. Co., 794 So. 2d 228, 232 (Miss.2001). Russell v. Orr, 700 So. 2d 619, 622 (Miss.1997); Richmond v. Benchmark Constr. Corp., 692 So. 2d 60, 61 (Miss.1997); Northern Elec. Co. v. Phillips, 660 So. 2d 1278, 1281 (Miss.1995). "This Court employs a factual review tantamount to that of the trial court when considering evidentiary matters in the record." Williams v. Bennett, 921 So. 2d 1269, 1272 (Miss.2006). ¶ 16. Rule 56(c) of the Mississippi Rules of Civil Procedure provides that summary judgment shall be granted by a court if "the pleadings, depositions, answers to interrogatories and admissions on file, together with 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." M.R.C.P. 56(c); see Saucier ex rel. Saucier v. Biloxi Reg'l Med. Ctr., 708 So. 2d 1351, 1354 (Miss.1998). The moving party has the burden of demonstrating that there is no genuine issue of material fact in existence, while the non-moving party should be given the benefit of every reasonable doubt. Tucker v. Hinds County, 558 So. 2d 869, 872 (Miss.1990). See also Heigle v. Heigle, 771 So. 2d 341, 345 (Miss. 2000). A fact is material if it "tends to resolve any of the issues properly raised by the parties." Palmer v. Anderson Infirmary Benevolent Ass'n, 656 So. 2d 790, 794 (Miss.1995). ¶ 17. "If, in this view, there is no genuine issue of material fact and, the moving party is entitled to judgment as a matter of law, summary judgment should forthwith be entered in his favor. Otherwise, the motion should be denied." Williamson ex rel. Williamson v. Keith, 786 So. 2d 390, 393 (Miss.2001). "Issues of fact sufficient to require denial of a motion for summary judgment obviously are present where one party swears to one version of the matter in issue and another says the opposite." Tucker, 558 So.2d at 872. Of importance here is the language of the rule authorizing summary judgment `where there is no genuine issue of material fact.' The presence of fact issues in the record does not per se entitle a 399 party to avoid summary judgment. The court must be convinced that the factual issue is a material one, one that matters in an outcome determinative sense ... the existence of a hundred contested issues of fact will not thwart summary judgment where there is no genuine dispute regarding the material issues of fact. Simmons v. Thompson Mach. of Miss., Inc., 631 So. 2d 798, 801 (Miss.1994) (citing Shaw v. Burchfield, 481 So. 2d 247, 252 (Miss.1985)). The evidence must be viewed in the light most favorable to the non-moving party. See Russell, 700 So.2d at 622; Richmond, 692 So.2d at 61; Northern Elec., 660 So.2d at 1281; Simmons, 631 So.2d at 802; Tucker, 558 So.2d at 872. ¶ 18. To avoid summary judgment, the non-moving party must establish a genuine issue of material fact within the means allowable under the Rule. Richmond, 692 So.2d at 61 (citing Lyle v. Mladinich, 584 So. 2d 397, 398 (Miss.1991)). "If any triable issues of fact exist, the lower court's decision to grant summary judgment will be reversed. Otherwise the decision is affirmed." Richmond, 692 So.2d at 61. I. Implied warranty for fitness for a particular purpose ¶ 19. The Plaintiffs contend that they were told by Ott & Lee that the casket was "top of the line." Before the Plaintiffs selected the wooden casket, the employees of Ott & Lee informed the Plaintiffs that a wooden casket could not be sealed like a metal casket. The Plaintiffs admit that they were aware that a wooden casket would not seal. Ott & Lee suggested a concrete vault be used with a wooden casket which the Plaintiffs purchased. The Defendants contend that the Plaintiffs' determinative factor as to the chosen casket was purely appearance. The Defendants argue that in choosing the casket the Plaintiffs never expressed any concern over how long the remains would be preserved. In fact, the Plaintiffs do not assert any specified time or number of years that they expected the remains to be preserved. Furthermore, nothing in the record demonstrates that the remains were not in fact properly preserved or had been affected by any cracks in the casket at the time the Plaintiffs had the body exhumed for the autopsy. ¶ 20. Miss.Code Ann. § 75-2-315 (Rev.2002) establishes the foundation for the concept of an implied warranty for fitness for a particular purpose. That statute provides in pertinent part: Except as otherwise provided in this section, where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is an implied warranty that the goods shall be fit for such purpose.... Miss.Code Ann. § 75-2-315 (emphasis added). In order to recover under the theory of implied warranty of fitness for a particular purpose, a plaintiff must present evidence sufficient for the jury to find: "(1) the seller at the time of the contracting had reason to know the particular purpose for which the goods were required; (2) the reliance by the plaintiff as buyer upon the skill or judgment of the seller to select suitable goods, and (3) the goods were unfit for the particular purpose." Garner v. S & S Livestock Dealers, Inc., 248 So. 2d 783, 785 (Miss.1971). See also Lacy v. Morrison, 906 So. 2d 126, 131 (Miss.Ct.App.2004). The warranty of fitness for a particular purpose does not arise unless there is reliance on the seller 400 by the buyer, and the seller selects goods which are unfit for the particular purpose. Garner, 248 So.2d at 785. ¶ 21. During discovery, depositions were taken from the Plaintiffs, Susan Moss, Tracy Nichols, and Kenny Moss. These depositions, which were provided to the trial court on motion for summary judgment, demonstrate that the Plaintiffs purchased the wooden casket for its aesthetic value. Susan Moss testified: We spotted the cherry wood casket, and he walked us over there to it. Ray Pardue walked us over there to it and we all decided, standing thereus fourthat it looked like our mother. That'sI meanshe had everything in her house was cherry wood. I mean, it just look like her. We asked Ray about the casket. I mean, I'm not stupid. I know a casket won't seala wood casket. ¶ 22. Tracy Nichols testified: We were looking at the different caskets, and when we saw the wood casket, we knew that we wanted this one for Mother because it looked just like her a wood cherry casket. And we were just allwas in agreement with it. ¶ 23. In his deposition, Kenny Moss testified that the reason he chose this casket was because his mother "just liked cherry wood furniture." He further stated, "[i]t just suited her." ¶ 24. The trial court determined that summary judgment was appropriate. In its findings of fact, the trial court stated: "This particular casket was chosen because their mother was especially fond of cherry wood furniture, and they felt she would have been happy about the decision." In the trial court's conclusion of law, the trial court stated: The Court is convinced from the deposition testimony that the Plaintiffs were well aware of the characteristic differences between a wooden casket as compared to a metal one, but that the former was selected because of their mother's love of cherry wood. The trial court found "the fitness purpose aspect was served during the time the decedent's body was placed in the casket and viewed by family members, loved ones [,] and friends at the funeral home." ¶ 25. Here, the evidence did not justify the submission of this case to a jury on the issue of warranty of fitness for a particular purpose. Nothing in the record provides that the Plaintiffs identified any particular purpose to the Defendants when the casket was selected. Furthermore, assuming arguendo that the Plaintiffs sought to preserve their mother's remains for some unspecified, indefinite period of time in the wooden casket, the record is completely devoid of any proof that the body had been damaged in any way by the alleged problems with the casket. As such, the burial had preserved the remains until the Plaintiffs had their mother's remains unearthed and the autopsy performed. We find the trial court did not err in granting summary judgment on this issue. II. Implied warranty for merchantability for an ordinary purpose ¶ 26. The Plaintiffs argue that, as reasonable consumers, they expected the casket to preserve the remains for an indefinite period of time. The Defendants contend that even if the Plaintiffs' theory that the ordinary purpose of the casket was to preserve the remains for an indefinite or some unknown period of time is accepted as true, there is no evidence in the record which indicates the remains were not in fact properly preserved for an indefinite or unknown period of time. When the remains were exhumed by the 401 Plaintiffs approximately two and one-half years after burial, the record reflects the remains were preserved. The Plaintiffs present no claim that the remains had been damaged in any way by the cracks and separations. As such, the Defendants assert the Plaintiffs' alleged ordinary purpose of the casket was satisfied. ¶ 27. Furthermore, the Defendants contend that the Plaintiffs fail to demonstrate that the casket selected was not merchantable or did not fulfill its ordinary purpose. In Craigmiles v. Giles, 110 F. Supp. 2d 658, 662 (E.D.Tenn.2000), affd. 312 F.3d 220 (6th Cir.2002), which is cited by the Ott & Lee, the district court stated: A casket is nothing more than a container for human remains. Caskets are normally constructed of metal or wood, but can be made of other materials. Some have "protective seals," but those seals do not prevent air and bacteria from exiting. All caskets leak sooner or later, and all caskets, like their contents, eventually decompose. ¶ 28. Likewise, Batesville contends the ordinary purpose of a wooden casket is to house the remains of the departed until interment. Batesville argues that ordinary purpose includes uses which the manufacturer intended and those which are reasonably foreseeable. See 77A C.J.S. Sales to Salvage § 256(b) (1994) ("The ordinary purposes contemplated by the [Uniform Commercial] Code include both those uses which the manufacturer intended and those which are reasonably foreseeable.") Accordingly, Batesville asserts that it would not be reasonably foreseeable that any customer would expect a wooden casket to preserve the remains for an indefinite period of time as claimed by the Plaintiffs. ¶ 29. Miss.Code Ann. § 75-2-314 (Rev. 2002) establishes the statutory foundation for the concept of an implied warranty for merchantability for an ordinary purpose. Miss.Code Ann. § 75-2-314 provides in pertinent part: (1) Except as provided in subsection (5), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.... (2) Goods to be merchantable must be at least such as: (a) Pass without objection in the trade under the contract description; and (b) In the case of fungible goods, are of fair average quality within the description; and (c) Are fit for the ordinary purposes for which such goods are used; and (d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and (e) Are adequately contained, packaged and labeled as the agreement may require; and (f) Conform to the promises or affirmations of fact made on the container or label if any. (3) Other implied warranties may arise from course of dealing or usage of trade. * * (5) Nothing in this section shall prohibit the express disclaimer or express modification of any implied warranties of merchantability.... (Emphasis added). ¶ 30. The trial court found that the ordinary purpose for which the casket was designed ceased once the pall bearers bore the casket from the hearse to the grave site for burial.[3] However, the record does 402 not indicate that the Plaintiffs ever stated a specified period of time that they, as a reasonable customer, would have reasonably expected the wooden casket to last. The Plaintiffs contend that they reasonably expected the casket to protect the remains for an indefinite period of time. Indefinite is defined as "without fixed boundaries or distinguishing characteristics; not definite, determinate, or precise." Black's Law Dictionary 393 (5th ed.1983). As previously stated, the record also fails to demonstrate that the remains were damaged in any way from the alleged cracks and separation when the casket and body were exhumed. Accordingly, we find the Plaintiffs' assignment of error is without merit. III. Strict Products Liability ¶ 31. In order "[t]o prevail in a products liability case, the Plaintiff must prove not only a defect in the product, but also that the defect made the product `unreasonably dangerous.'" Pickering v. Industria Masina I Traktora (IMT), 740 So. 2d 836, 843 (Miss.1999) (quoting Sperry-New Holland v. Prestage, 617 So. 2d 248, 253 (Miss.1993)). Miss.Code Ann. § 11-1-63 (Rev.2002) codified strict liability law and provides in pertinent part: (a) The manufacturer or seller of the product shall not be liable if the claimant does not prove by the preponderance of the evidence that at the time the product left the control of the manufacturer or seller: (i) 1. The product was defective because it deviated in a material way from the manufacturer's specifications or from otherwise identical units manufactured to the same manufacturing specifications, or 2. The product was defective because it failed to contain adequate warnings or instructions, or 3. The product was designed in a defective manner, or 4. The product breached an express warranty or failed to conform to other express factual representations upon which the claimant justifiably relied in electing to use the product; and (ii) The defective condition rendered the product unreasonably dangerous to the user or consumer; and (iii) The defective and unreasonably dangerous condition of the product proximately caused the damages for which recovery is sought. (b) A product is not defective in design or formulation if the harm for which the claimant seeks to recover compensatory damages was caused by an inherent characteristic of the product which is a generic aspect of the product that cannot be eliminated without substantially compromising the product's usefulness or desirability and which is recognized by the ordinary person 403 with the ordinary knowledge common to the community. * * * (e) In any action alleging that a product is defective pursuant to paragraph (a)(i)2 of this section, the manufacturer or seller shall not be liable if the danger posed by the product is known or is open and obvious to the user or consumer of the product, or should have been known or open and obvious to the user or consumer of the product, taking into account the characteristics of, and the ordinary knowledge common to, the persons who ordinarily use or consume the product. (f) In any action alleging that a product is defective because of its design pursuant to paragraph (a)(i)3 of this section, the manufacturer or product seller shall not be liable if the claimant does not prove by the preponderance of the evidence that at the time the product left the control of the manufacturer or seller: (i) The manufacturer or seller knew, or in light of reasonably available knowledge or in the exercise of reasonable care should have known, about the danger that caused the damage for which recovery is sought; and (ii) The product failed to function as expected and there existed a feasible design alternative that would have to a reasonable probability prevented the harm. A feasible design alternative is a design that would have to a reasonable probability prevented the harm without impairing the utility, usefulness, practicality or desirability of the product to users or consumers. * * * (Emphasis added). ¶ 32. Dr. Smith was the only expert that the Plaintiffs offered in defense of the Defendants' motion for summary judgment. Dr. Smith, an expert in wood rot, decay, and degradation, did not find any problem with the physical and mechanical properties of the wood. He further stated that decay is a natural process in wood even though wood is a proper material to use to manufacture a casket. He determined that the casket had separated at the glued joints based on poor adhesive bonds where the cherry wood boards had been glued together to form the casket. ¶ 33. Rule 702 of the Mississippi Rules of Evidence addresses the admissibility of expert testimony. M.R.E. 702 provides: If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. (Emphasis added). In Tunica County v. Matthews, 926 So. 2d 209, 213 (Miss.2006), this Court recently examined the requirements for allowing expert testimony, stating: In McLemore [Mississippi Transportation Comm'n v. McLemore, 863 So. 2d 31 (Miss.2003)], this Court adopted the standard initially laid out by the United States Supreme Court in Daubert [Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993)], and later modified 404 in Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119 S. Ct. 1167, 143 L. Ed. 2d 238 (1999). McLemore, 863 So.2d at 35, 39. That standard is a two-pronged test. For expert testimony to be admissible, it must be both relevant and reliable. Id. at 38. The party offering the testimony must show that the expert based his opinion not on opinions or speculation, but rather on scientific methods and procedures. Id. at 36. ¶ 34. The Court made it clear the role that the trial judge plays in assessing whether to allow expert testimony: The trial judge enjoys a role as a gatekeeper in assessing the value of the testimony. Id. at 39 [McLemore, 863 So.2d at 39]. To be relevant and reliable, the testimony must be scientifically valid and capable of being applied to the facts at issue. Id. at 36. See also Poole ex rel. Poole v. Avara, 908 So. 2d 716, 721-25 (Miss.2005). Matthews, 926 So.2d at 213. See also McLemore, 863 So.2d at 36 ("The trial court must make a `preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning and methodology properly can be applied to the facts in issue.'" (quoting Daubert, 509 U.S. at 592-93, 113 S. Ct. 2786, 125 L. Ed. 2d 469)). As the trial court operates as the gatekeeper as to the admissibility of expert testimony, we examine the trial court's decision under an abuse of discretion standard of review. Matthews, 926 So.2d at 216. ¶ 35. Here, Dr. Smith testified in his deposition that he did not hold himself out as an expert in the field of adhesives. Dr. Smith testified that his background was in wood sciences. Further, he did not perform any studies on the specific adhesives involved in this case. Based on Dr. Smith's testimony, the trial court accepted his expert opinion as to wood, but it did not accept Dr. Smith as an expert regarding adhesive bonds. Accordingly, the trial court did not consider Dr. Smith's opinion as to the adhesive. We find the trial court did not abuse its discretion regarding Dr. Smith's testimony. ¶ 36. Furthermore, the Plaintiffs did not present any expert in the area of caskets, casket design, or funeral/burial services. Therefore, the Plaintiffs failed to present any expert at the motion for summary judgment to demonstrate that there was a defect in the product, a deviation from the manufacturer's specifications, or a defective design. ¶ 37. The trial court further relied upon the Plaintiffs' deposition testimony that the reason the cherry casket was selected was for its aesthetic properties based on their mother's love of cherry wood. In fact, Susan Moss testified as follows: I'm not stupid. I know a casket won't seala wood casket. I knew that before that. But we were talking to him [Ray Pardue] about the casket, and he told uswe asked him about that one. And he told us it was top of the line, and that-but we had to buy a vault because the wood casket did not seal. The testimony as the wood casket's inability to seal continued as follows: Q: And you indicated that you were aware of that previously? A: That the wood casket would not seal? Q: Right. A: Yes. Q: You indicated that you told him you wanted a good casket. Did you tell him anything else in the casket that you wanted? A: I don't remember really having a conversation, I mean, like, okay, I 405 want one that's this color or this color or-we saw that one. It was kind of up at the front. * * * Q: Was there any more discussion? Did anyone later on say anything about maybe making another choice on a casket? A: No, sir. Q: So from that point on, there was no doubt it would be that Pembroke cherry wood casket? A: Yes, sir. ¶ 38. It is apparent that the Plaintiffs were aware that the wood casket would not seal. The Plaintiffs even admit that Ott & Lee informed them that a wooden casket would not seal when the cherry wood casket was selected. As such, this characteristic of a wooden casket was open and obvious to the Plaintiffs at the time the casket was selected. The Plaintiffs did not present any evidence that they made any particular requests about of the casket. According to the Plaintiffs, once they spotted the cherry wood casket, they did not look any further. The trial court stated: The Court is convinced from the deposition testimony that the Plaintiffs were well aware of the characteristic differences between a wooden casket as compared to a metal one, but that the former was selected because of their mother's love of cherry wood. ¶ 39. Likewise, Dr. Smith stated that decay is a natural process in wood even though wood is a proper material to use to manufacture a casket. Clearly, it is obvious that an ordinary person would not expect an interred wooden casket to last forever. A concrete vault was selected, at Ott & Lee's suggestion, to use in conjunction with the casket since a wooden casket would not seal. As previously stated, there was no evidence that the remains had been damaged in any way by the alleged cracks and separations. ¶ 40. The trial court, finding no evidence of a defect in the product or defective design, concluded that the Plaintiffs failed to meet the recurring requirements under Miss.Code Ann. § 11-1-63. The trial court stated: The recurring statutory word(s) in said Code section are defect and defective. Section 11-1-63(b) addresses the particular facts in the case sub judice. To elaborate thereon and as stated aforesaid, one of the inherent characteristic of wood is that it rots, and absent any proof of any patent defect in the casket at the time of purchase, there can be no successful claim for a products liability violation. The trial court further stated that "the heart of Dr. Smith's report laid the fault at the glue-line failures, a field which was not in the area of his expertise." ¶ 41. Likewise, in his report Dr. Kim did not hold himself out as an expert in the area of caskets or casket design. Dr. Kim stated that an alternative would have lasted longer under the conditions. However, no evidence was presented that demonstrated that the alternative glue would have allowed the wooden casket to last for an "indefinite" period of time. In fact, no specific time was provided. Again, there was no evidence that the Plaintiffs ever specified a period of time that they expected the casket to last when the casket was selected. They were informed that the casket would not seal. Nothing presented by the Plaintiffs demonstrates that the remains had been affected by the alleged cracks and separations. ¶ 42. Regardless of which subsection of Miss.Code Ann. § 11-1-63(a)(i) a plaintiff sues under, the plaintiff must prove: (1) 406 the defective condition rendered the product unreasonably dangerous to the user or consumer unreasonably dangerous and (2) the defective and unreasonably dangerous condition of the product proximately caused the damages. See Miss.Code Ann. § 11-1-63(a)(ii) & (iii). ¶ 43. The statute's language is clear that in order for the manufacturer or seller to be liable the requirements specified in subsections (a)(i)-(iii) shall be proven beyond a preponderance of the evidence. See Miss.Code Ann. § 11-1-63(a). This Court has held that "plaintiffs have the burden of showing that the `defect that allegedly was the proximate cause of their injury existed at the time that the product left the hands of the manufacturer, and that the defect rendered the product unreasonably dangerous.'" 3M Co. v. Johnson, 895 So. 2d 151, 165 (Miss.2005) (quoting Clark v. Brass Eagle, Inc., 866 So. 2d 456, 461 (Miss.2004) (emphasis added)). ¶ 44. Even considering Dr. Kim's affidavit, which was not presented until the Plaintiffs' motion for reconsideration, the Plaintiffs failed to demonstrate that the alleged defective condition of the casket resulted in an unreasonably dangerous condition to the user or consumer and that the defective and unreasonably dangerous condition of the casket proximately resulted in any damage as required under the Products Liability Act, Miss.Code Ann. § 11-1-63(a)(ii) & (iii). See 3M, 895 So.2d at 165; Brass Eagle, 866 So.2d at 461; Pickering, 740 So.2d at 843. ¶ 45. Since the evidence necessary to maintain this suit under Miss.Code Ann. § 11-1-63 was legally insufficient, we find that summary judgment in favor of the Defendants as to the products liability claim was proper. This assignment of error is without merit. IV. Negligence Claims ¶ 46. The trial court concluded that the findings on the warranty counts are dispositive of the remaining counts. The Plaintiffs acknowledge on appeal that the remaining counts are based on the warranty counts, stating: [T]he trial court dismissed them [the remaining counts] apparently because they each rested on there having been an underlying breach of either a warranty or a duty revolving around the design or manufacture of the casket. In this, Judge Cotten was correct. ¶ 47. The trial court, citing May v. V.F.W. Post 2539, 577 So. 2d 372, 375 (Miss.1991), also stated that the Plaintiffs failed to prove the elements of negligence: (1) duty, (2) breach of that duty, (3) nexus, causation or proximate cause, and (4) damages. The Defendants contend that the Plaintiffs merely reargue the warranty claims previously discussed under the guise of negligence. We agree. The Plaintiffs fail to present any new discussion or claim that does not relate back to the warranty claims or the products liability claim which have previously been determined to be legally insufficient to survive summary judgment. ¶ 48. In May, 577 So.2d at 375, this Court stated: Because May brought a negligence claim against the VFW, he had to prove by a preponderance of the evidence: duty, breach of duty, proximate cause and damages. Foster v. Bass, 575 So. 2d 967, 972 (Miss.1990); Palmer v. Biloxi Regional Medical Center, Inc., 564 So. 2d 1346, 1354 (Miss.1990); Phillips v. Hull, 516 So. 2d 488, 491-92 (Miss.1987). "Only when the first two items are shown is it possible to proceed to a consideration of proximate cause since a duty and breach of that duty are essential to a finding of negligence 407 under the traditional and accepted formula." Foster, 575 So.2d at 972. (Emphasis added). See also Lovett v. Bradford, 676 So. 2d 893, 896 (Miss.1996). ¶ 49. Here, the Plaintiffs fail to establish what duty the Defendants owed. The argument reexamines the argument under the implied warranties discussed in Issues I and II. The Plaintiffs make a circular argument that the implied warranties establish the duty owed and because the implied warranties were breached, the duty had been breached. As discussed above, the Plaintiffs failed to establish that any implied warranties were breached. ¶ 50. Furthermore, Ott & Lee argue that the Plaintiffs presented no expert as to what duty Ott & Lee owed with regard to the sale of this casket. Ott & Lee contends that the Plaintiffs chose the casket based on what they liked. The Plaintiffs were informed the wooden casket would not seal before the casket was purchased, and a burial vault was recommended. ¶ 51. The record does not reflect that the remains had been damaged in any way at the time the Plaintiffs had their mother's body exhumed and the autopsy performed in an effort to investigate a possible medical malpractice case. Further, the Plaintiffs failed to establish that the Defendants breached any implied warranties. Thus, there was no evidence of any damage to the remains or any breach to support a negligence claim. ¶ 52. Therefore, we find the trial court did not err in finding that the necessary elements for a negligence claim had not been established and that the Defendants were entitled to summary judgment. Accordingly, this issue is without merit. CONCLUSION ¶ 53. For the reasons stated above, we find the trial court did not err in granting summary judgment in favor of the Defendants. Accordingly, the judgment of the Circuit Court of Scott County, Mississippi, is affirmed. ¶ 54. AFFIRMED. SMITH, C.J., WALLER, P.J., CARLSON, DICKINSON AND RANDOLPH, JJ., CONCUR. COBB, P.J., DIAZ AND GRAVES, JJ., CONCUR IN RESULT ONLY. NOTES [1] The Plaintiffs, Susan Moss, Tracy Nichols, Kenny Moss, and Rory Garcia, are the four adult children of Nancy Moss Minton, deceased. [2] The exhumation was performed by Doric Vault Company, Wilcox Funeral Home, and Johnny Harrell. [3] The Plaintiffs contend that this issue must be resolved by a jury, and as such, the trial court could not rule on the motion for summary judgment. The Plaintiff relies on Royal Lincoln-Mercury Sales, Inc. v. Wallace, 415 So. 2d 1024, 1027 (Miss.1982). However, the Plaintiffs take the Court's holding out of context. The Court in Royal, 415 So.2d at 1027, was concerned with whether attorneys' fees were appropriate under the facts of that case, stating: The relevant issue, reasonable opportunity to cure, was factual and in our opinion was properly left for the jury's determination under correct instructions. The issue was resolved in plaintiff's favor by the jury as is evidenced by its verdict. Thereafter, upon proper motion, the court awarded attorneys fees. We are of the opinion the Magnuson-Moss Warranty Act did have application and that the issue presented under it was properly resolved.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/8326686/	Ricciardone, David, J. The defendants seek an order compelling production of notes written by the plaintiff concerning events in the days leading up to her husband’s death in the aftermath of oral surgeiy. Plaintiff argues that the notes are protected by the attorney-client privilege, or otherwise not discoverable as “work product.” Even assuming that the plaintiffs nephew, who is an attorney, actually advised the plaintiff to take the notes, this court does not view the notes themselves as “communications looking toward representation,” as the plaintiff argues, citing Commonwealth v. O’Brien, 377 Mass. 772, 775-76 (1979). In that criminal case, the court was sensitive to the fact that the mere question “(w]ill you be my lawyer?" in the context of criminal allegations may well be construed as consciousness of guilt. Id. The court in O’Brien went on to declare: “On the other hand, the privilege runs con-traiy to the interest in full disclosure of relevant information and, therefore, should be narrowly construed” and that “There is no presumption of confidentiality; it must be determined in the circumstances.” Id. at 775.1 Here, the plaintiffs notes were a contemporaneous recording of facts; this was an act that was not intended as private communications with her attorney, even if her nephew the attorney suggested that she do so. Nor is the contention that such notes are protected under a theoiy of “work product” persuasive. In determining whether a document was prepared in anticipation of litigation, courts ask whether the document can be fairly said to have been prepared or obtained because of the prospect of litigation; the mere occurrence of an “incident that would possibly subject [an entity] to litigation is not dispositive of the determination whether the memorandum was prepared in anticipation of litigation,” City of Worcester v. HCA Management Co., Inc., 839 F.Sup. 86, 88 (D.Mass. 1993). Further, as suggested in the “Reporter’s Notes— 1973" following Rule 26 of the Mass. Rules of Civil Procedure, the doctrine of work product exists to protect ”an attorney’s mental impressions and similar intellectual work-product. This protection applies also to ‘other representative(s) of a party’ provided their work relates to litigation" (citations omitted, emphasis supplied). Hence the language of the rule itself: “the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.” Rule 26(b)(3). The plaintiffs notes here fall well outside the protections to be afforded true work product. The notes were made of facts which the party purportedly witnessed herself, were made at a time when litigation was a mere possibility, and deal with facts that she has placed at the center of this controversy when she filed suit. The notes must be disclosed. Therefore, based on the foregoing, the defendants’ motion to compel production of documents is ALLOWED. ORDER The plaintiff is hereby ordered to produce the notes she identified in discoveiy to the defendants within fourteen (14) days of this decision. I omit the internal citations but note that O’Brien cites the second case argued by the plaintiff, Foster v. Hall 12 Pick 89, 97-98 (1831), supporting the language of the text here.	01-03-2023	10-17-2022
https://www.courtlistener.com/api/rest/v3/opinions/1768783/	892 S.W.2d 848 (1995) TRAVELERS INDEMNITY COMPANY OF ILLINOIS and Travelers Insurance Company, Petitioners v. Regina FULLER, Respondent. No. 94-0648. Supreme Court of Texas. February 16, 1995. 849 Jerry L. Beane, P. Michael Jung, Martha C. Coleman, and J. Wiley George, Dallas, for petitioners. Richard J. Clarkson, John Hinson, and Alto V. Watson, III, Beaumont, for respondent. OPINION Justice HIGHTOWER delivered the opinion of the Court, in which all Justices join. In this case we must decide whether Article 16, Section 26 of the Texas Constitution creates an independent cause of action for punitive damages where no cause of action for compensatory damages otherwise exists. Because the Workers' Compensation Act bars Regina Fuller's cause of action for compensatory damages, and because we find that Article 16, Section 26 was not intended to abrogate the common law requirement of "actual damages," we reverse the judgment of the court of appeals and render judgment that Fuller take nothing. Regina Fuller sued Travelers Indemnity Company of Illinois and Travelers Insurance Company (hereinafter collectively referred to as "Travelers"), claiming that their gross negligence proximately caused the death of her father. She alleged that her father, while employed at American Petrofina, was exposed to assorted polynuclear, aromatic hydrocarbons which caused his death from adenocarcinoma. Travelers was the compensation carrier for American Petrofina during the relevant time period. As part of its program of insurance, Travelers performed safety audits and industrial hygiene surveys at the refinery where Fuller's father was employed. Fuller contends that Travelers was negligent and grossly negligent in failing to alleviate the health and safety hazards at the refinery and in failing to warn her father of their existence. Travelers moved for summary judgment, contending that it was immune from such suits under the Texas Workers Compensation Act. Fuller opposed the summary judgment contending that the Texas Constitution creates a cause of action for punitive damages which does not depend upon her right to compensatory relief, and therefore, the Workers' Compensation Act was unconstitutional to the extent that it limited her right to punitive damages. She further maintained that the provision limiting her right to pursue a wrongful death recovery violates the Open Courts Provision in Article 1, Section 13 of the Texas Constitution. The trial court granted summary judgment in favor of Travelers. On rehearing, with one justice dissenting, the court of appeals reversed, holding that our constitution creates a cause of action for punitive damages which is in no way dependent upon Fuller's entitlement to compensatory relief. 874 S.W.2d 958. We reverse the judgment of court of appeals. I. The former Workers' Compensation Act, which governs this dispute, provided, in relevant part: The Association, its agent, servant or employee, shall have no liability with respect to any accident based on the allegation that such accident was caused or could 850 have been prevented by a program, inspection, or other activity or service undertaken by the association for the prevention of accidents in connection with operations of its subscriber; provided, however, this immunity shall not affect the liability of the association for compensation or as otherwise provided in this law. See Acts 1963, 58th Leg., p. 1132, ch. 437, § 1, repealed by Acts 1989, 71st Leg., 2nd C.S., ch. 1, § 16.01(7) to (9).[1] Fuller argues that the Texas Constitution, on its face, provides for a punitive damages cause of action. The disputed provision reads: Every person, corporation, or company, that may commit a homicide, through wilful act, or omission, or gross neglect, shall be responsible, in exemplary damages, to the surviving husband, widow, heirs of his or her body, or such of them as there may be, without regard to any criminal proceeding that may or may not be had in relation to the homicide. Tex. Const. art. XVI, § 26 (Vernon 1993). Juxtaposing this provision with the Workers' Compensation Act, Fuller argues that the legislature is powerless to impair her punitive recovery. We disagree. We must first note that when the legislature acts, we presume that it has acted constitutionally. Spring Branch Ind. Sch. Dist. v. Stamos, 695 S.W.2d 556, 558 (Tex. 1985); Robinson v. Hill, 507 S.W.2d 521, 524 (Tex.1974). Thus, the burden is Fuller's to demonstrate some constitutional infirmity. We further note that a constitutional provision must be interpreted in light of the historical context in which it was enacted. Director of Dep't of Agriculture & Environment v. Printing Indus. Ass'n, 600 S.W.2d 264, 267 (Tex.1980); Mumme v. Marrs, 120 Tex. 383, 40 S.W.2d 31, 35 (1931). To understand this constitutional provision which is unique to our state constitution, "a page of history is worth a volume of logic." New York Trust Co. v. Eisner, 256 U.S. 345, 349, 41 S. Ct. 506, 507, 65 L. Ed. 963 (1921) (Holmes, J.). When the language of the constitution is read in light of the legal history existing at the time of its adoption, it is clear that its purpose was the resolution of ambiguities existing in the statutory and common law of punitive damages, not the extension of a right to punish which exceeds the right to compensatory relief. In 1840, the Republic of Texas adopted the common law as its rules of decision. See Grigsby v. Reib, 105 Tex. 597, 153 S.W. 1124, 1125 (1913) (citing Laws 1840, p. 3, now codified at Tex.Civ.Prac. & Rem.Code Ann. § 5.001 (Vernon 1986)). The language of Article 16, Section 26 reveals an intent to resolve two controversies existing at common law. At the time of this initial adoption it was well established at common law that there was no cause of action for wrongful death. See Russell v. Ingersoll-Rand Co., 841 S.W.2d 343, 345 (Tex.1992); Farmers' & Mechanics' Nat'l Bank v. Hanks, 104 Tex. 320, 137 S.W. 1120, 1122 (1911); Hendrix v. Walton, 69 Tex. 192, 6 S.W. 749 (1887). See also Pinchon's Case, 9 Coke 86b, 87a, 77 Eng. Rep. 859 (K.B. 1609). A prominent common law decision refusing to allow recovery for wrongful death did so on the basis that a death is solely a criminal matter and not cognizable in a civil court. See Baker v. Bolton, 1 Camp. 493, 170 Eng.Rep. 1033 (1808). Further, a division of authority existed in the middle and late 19th century concerning whether punitive damages were recoverable when the same wrong was punishable in a criminal proceeding. See W. Eggleston, Eggleston on Damages § 47 (1880); J. Sutherland, 1 Sutherland on Damages Ch. 851 IX, p. 738 (1883).[2] Article 16, Section 26 confronted these enigmas by making punitive damages recoverable "without regard to any criminal proceeding that may or may not be had in relation to the homicide." Tex. Const. Ann. art. 16, § 26 (Vernon 1993). In addition to answering these common law questions, the amendment undertook to resolve a statutory question. In 1846, England abolished the common law bar against wrongful death actions with the adoption of Lord Campbell's Act. Texas soon followed with its own wrongful death act, similar in many respects to its English counterpart. See Act approved Feb. 2, 1860, 8th Leg., R.S., ch. 35, § 1, 1860 Tex.Gen. Laws 32, 4 H. Gammel, Laws of Texas 1394 (1898); Hendrix v. Walton, 69 Tex. 192, 6 S.W. 749, 750 (1887). One ambiguity common to the early wrongful death acts was whether they created a new cause of action in the heirs of the deceased, or whether they simply transmitted to the heirs a right to sue which had previously resided in the deceased. See Tex. Const.Ann. Art. 16, § 26, interp. commentary (Vernon 1993). If the former were correct, the right to punitive damages would die with the deceased. If the latter, then the heirs could pursue punitive damages. Id. See also General Chemical Corp. v. De La Lastra, 852 S.W.2d 916, 922-23 (Tex.1993). With a statutory cause of action for compensatory damages already in place, the constitution was amended to allow for punitive damages in favor of the wrongful death beneficiaries. The question soon arose whether this amendment, in addition to clarifying the survival question, also granted a punitive recovery independent of compensatory relief. As soon as it arose, the question was answered in the negative. In Ritz v. City of Austin, 1 Tex. Civ. App. 455, 20 S.W. 1029 (1892, writ ref'd), the court of civil appeals was confronted with wrongful death claimants who were not entitled to compensatory damages because the wrongful death statute, as then construed, did not allow a right of action against a municipal corporation. As in this case, the plaintiffs contended that the constitutional provision granted the remedy of exemplary damages, independent of the statute which provided compensatory relief. The court disagreed, stating: Our courts have repeatedly held that no recovery can be had for exemplary damages unless the facts are such as warrant a recovery for actual damages.... The purpose of this constitutional provision was simply to create a remedy that did not exist at common law. The fact that exemplary damages are recoverable by force of this constitutional provision does not place the right upon a more certain basis or higher plane than exists in those cases in which such character of damages is recoverable at common law. Id. at 1031 (emphasis added).[3] Thus, the reason for adoption of the constitutional provision 852 was to allow for exemplary damages under the Wrongful Death Act because of an early interpretation that such damages were not authorized by the Act. See Hofer v. Lavender, 679 S.W.2d 470 (Tex.1984). It did not abrogate the common law requirement of actual damages and extend the remedy to those with no cause of action under the Act. The manifest purpose of the language of this constitutional provision is to expressly resolve common law and statutory ambiguity.[4] Fuller's proposed interpretation would have us read the constitution to allow punitive damages without regard to whether the heirs have suffered a compensable injury. This would effectively add, by inference, a clause to our constitution allowing the punishment of a party from whom the plaintiff is not entitled to extract compensation. We decline to do so for several reasons. First, such a clause would be inconsistent with the long settled rule that a plaintiff must show himself entitled to compensatory relief before punitive damages are recoverable. See, e.g., Wright v. Gifford-Hill & Co., 725 S.W.2d 712, 713-14 (Tex.1987); Nabours v. Longview Sav. & Loan Ass'n, 700 S.W.2d 901, 903-05 (Tex.1985); Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 409 (1934); Traweek v. Martin-Brown Co., 79 Tex. 460, 14 S.W. 564, 565 (1890); Flanagan v. Womack, 54 Tex. 45, 50 (1880). Second, it would be inconsistent with the historical setting in which the constitution was enacted, some of which has been recounted above.[5] Third, if the immunity granted by the Workers' Compensation Act must yield to this constitutional provision, are statutes of limitation and other legislatively created bars to recovery also constitutionally infirm? We presume the legislature acted constitutionally there as here. If the provision were so inconsistent with its historical context, and if its intention was to overturn the common law "actual damages" rule, we believe it would not have done so by inference; rather, it would have done so expressly, as it did with *853 the survival and criminal merger issues. Fuller has thus failed to carry her burden. II. Fuller lastly argues that Travelers' immunity under the Workers' Compensation Act violates the Texas Open Courts Provision. See Tex. Const. art. I, § 13 (Vernon 1984). We disagree. Generally speaking, the Open Courts Provision restricts the legislature's ability to withdraw all legal remedies from one having a cause of action well established and well defined in the common law. See Lebohm v. City of Galveston, 154 Tex. 192, 275 S.W.2d 951 (1955). The Open Courts Provision has no applicability whatsoever to a cause of action for wrongful death, inasmuch as such a cause of action did not exist at common law. Rose v. Doctors Hospital, 801 S.W.2d 841, 845 (Tex.1990); Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 355-56 (Tex. 1990). To the extent that punitive damages are a common law remedy, they are also dependent at common law upon actual damages. Thus, no constitutional infirmity is created when the legislature removes a purely statutory right to compensation under the wrongful death act. Because the Workers' Compensation Act bars Fuller's cause of action for compensatory damages, and because Article 16, Section 26 guarantees the remedy of punitive damages only when a wrongful death beneficiary otherwise possesses a cause of action for compensatory relief, we reverse the judgment of the court of appeals and render judgment that Fuller take nothing. NOTES [1] The current Workers' Compensation Act similarly provides: An insurance company, the agent, servant, or employee of the insurance company, or a safety consultant who performs a safety consultation... has no liability for an accident based on an allegation that the accident was caused or could have been prevented by a program, inspection, or other activity or service undertaken by the insurance company for the prevention of accidents in connection with the operations of the employers. See Tex.Labor Code Ann. § 411.003(a) (Vernon Supp.1995). [2] One authority even claimed that, at common law, exemplary damages were not recoverable when the offense was criminal. See G. Field, Field on Damages § 89 (1878). [3] The Ritz court is not alone in holding that Article 16, Section 26 did not change the common law actual damages requirement. See, e.g., Suber v. Ohio Medical Products, Inc., 811 S.W.2d 646, 651 (Tex.App.Houston [14th Dist.] 1991, writ denied); Go Int'l, Inc. v. Lewis, 601 S.W.2d 495, 499 (Tex.Civ.App.El Paso 1980, writ ref'd n.r.e.); Wilson v. Brown, 154 S.W. 322, 324 (Tex.Civ.App.Austin 1912, writ ref'd). Although the Beaumont Court of Appeals thought otherwise, no case has been found with a holding contrary to Ritz. Two of our older cases contain language to the effect that the legislature is without power to abrogate a claimant's wrongful death punitive damages recovery by statute. See Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 408 (1934); Morton Salt Co. v. Wells, 123 Tex. 151, 70 S.W.2d 409, 410 (1934). Since those cases involve employers sued as defendants, and since the legislature expressly allowed employee/employer actions under the Workers' Compensation Act, this language is dicta, a mere expression of opinion on a point or issue not necessarily involved in the cases which does not create binding precedent under stare decisis. See Lester v. First American Bank, 866 S.W.2d 361, 363 (Tex.App.Waco 1993, writ denied) (citing Boswell v. Pannell, 107 Tex. 433, 180 S.W. 593, 597 (1915); Grigsby v. Reib, 105 Tex. 597, 153 S.W. 1124, 1126 (1913)). Fuller also relies on language in Paradissis v. Royal Indemnity Co., 507 S.W.2d 526, 529 (Tex. 1974) to the effect that employers and insurers are "exempt from common law liability ... except for certain exemplary damages in death cases specifically provided for by the Act." Id. (emphasis added). Overlooking for the moment that no one died in Paradissis, it does not change the result in this case. The former Workers' Compensation Act specifically provided for exemplary damages in wrongful death cases brought against employers where gross negligence is proved. See Wright v. Gifford-Hill & Co., 725 S.W.2d 712 (Tex.1987). No such express provision is made for cases against insurers. Thus, this case does not involve exemplary damages "specifically provided for by the Act." [4] As previously stated, this provision is unique to our state constitution. See 2 G. Braden, The Constitution of the State of Texas: An Annotated and Comparative Analysis, Art. XVI, § 26 at 757 (1977). "Unique" is perhaps the kindest epithet one could cast at a constitutional provision the sole purpose of which is to change "judge-made" law. Said one commentator: In acting from noblest motives to provide for exemplary damages in a wrongful death suit, because damages were not allowed by the courts and the statute was ambiguous, the Convention of 1875 unintentionally limited the power of future legislatures to expand the class of those entitled to damages. The result is an anomaly. The intentional or grossly negligent killing of a parent may be punished and deterred by awarding exemplary damages to his or her surviving children, but not vice versa. The law of torts, recovery for wrongful death, entitlement to exemplary damages, etc., should be left to the legislature and courts to develop. The inclusion of narrow rules on these topics in the constitution too frequently results in the imposition of unintended limitations on the power of the legislature and courts to do justice. Id. at 757-58. [5] The history of punitive damages also reveals that the early courts considered the remedy a part of the jury's discretion to punish an offender who had injured the plaintiff in some aggravated fashion. The early judges gave the jury discretion to inflate a general damage award where the plaintiff's injury, though comparatively small, was inflicted in a manner which the law sought to prevent. See, e.g., Huckle v. Money, 2 Wilson 205 ("The personal injury done to the plaintiff was very small ... but ... [the jury] ... saw the magistrate over the king's subjects exercising arbitrary power, violating Magna Charta (sic), and attempting to destroy the liberty of the kingdom...."); Tullidge v. Wade, 3 Wilson 18 ("[A]lthough the plaintiff's loss in this case may not amount to twenty shillings, yet the jury have done right in giving liberal damages.") These and other authorities are discussed in Field, supra at § 81. This approach, like the Texas rule, assumes some injury or invasion of a cognizable right as a necessary prerequisite to recovery.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2596506/	938 F. Supp. 767 (1996) Jimmie L. PETERSON, et al., Plaintiffs, v. BMI REFRACTORIES, INC., Defendant. No. CV-95-N-2260-S. United States District Court, N.D. Alabama, Southern Division. June 26, 1996. 768 Samuel Fisher, Elizabeth Evans Courtney, Gordon Silberman Wiggins & Childs, Birmingham, AL, for plaintiffs. John J. Coleman, III, Marcel L. Debruge, Balch & Bingham, Birmingham, AL, Richard A. Meelheim, Meelheim & Alexander PC, Birmingham, AL, for defendant. Memorandum of Opinion EDWIN L. NELSON, District Judge. I. Introduction. This matter comes before the court on motion of the defendant to stay certain proceedings in the Circuit Court of Montgomery County, Alabama. The motion was filed on May 22, 1996 and, because of the urgent nature of the relief requested, the court conducted a hearing on the following day, Thursday, May 23, 1996. After a telephone conference with the undersigned, the state court judge who was conducting the proceedings that were the subject of the motion agreed to withhold further action until this court's ruling. Since the aforesaid hearing, plaintiffs' counsel has been allowed an opportunity to file a written response to the motion and has done so. The defendant has replied to that response. In addition to matters raised directly by the parties, the court believes it is compelled sua sponte to address other matters, including questions regarding its own jurisdiction.[1] II. Findings of Fact. A. Proceedings in the Circuit Court of Jefferson County, Alabama. Plaintiffs Jimmie L. Peterson and Alonzo Reese initiated this action by filing a complaint in the Circuit Court of Jefferson County, Alabama on February 2, 1995, case number CV-00797. They asserted claims for race discrimination under the Civil Rights Act of 1964, as amended, and 42 U.S.C. § 1981. They also asserted breach of contract and assault and battery claims. Mr. Samuel Fisher, their attorney, listed the defendant's address as being "B.M.I. Refractories, Inc., 268 Oxmoor Court, Birmingham, Al. 35209." The clerk of the Jefferson County court notified Mr. Fisher by mail dated April 12, 1995, that the summons and complaint had been returned "not found" and requested that he furnish the court with a "corrected address." An alias summons listing the defendant's address as "BMI Refractories, Inc., 4120 Wall Street, Montgomery, Alabama 36106" was issued on April 25, 1995. It was returned unserved on April 28, 1995, with the notation that "BMIR Inc. Not agent." Judge Wayne Thorn entered an order on June 9, 1995, by which the action was dismissed without prejudice for plaintiffs' failure to perfect service within the allowed time. The court clerk notified Mr. Fisher on June 23, 1995, that the action had been dismissed and, on June 28, 1995, the plaintiffs moved the court to reinstate the action and for the appointment of a special process server. Judge Thorn granted the motions by order of July 31, 1995, and also ordered that the case be "transferred to the Circuit Court of Montgomery, Alabama." The case was transferred on August 10, 1995.[2] Meanwhile, on August 3, 1995, the summons and complaint, issued out of the Circuit Court of Jefferson County, Alabama, were properly served upon the defendant in Jefferson County, Alabama. On September 1, 1995, attorney Richard Meelheim filed a notice of removal in this 769 court, asserting original jurisdiction under 28 U.S.C. § 1331 and removal jurisdiction under 28 U.S.C. § 1441. More or less simultaneously Mr. Meelheim filed a document entitled "Notification of Filing Notice of Removal" with the Clerk of the Circuit Court of Jefferson County, Alabama. The notice was addressed to "The Plaintiffs and Their Attorneys and the Clerk of Courts, Circuit Court for Jefferson County, State of Alabama." The notice contained no certificate of service but had the case numbers from both this court and the Circuit Court of Jefferson County, Alabama.[3] B. Proceedings in the Circuit Court of Montgomery County, Alabama. Records of proceedings had in the Circuit Court of Montgomery County, Alabama demonstrate the following pertinent facts: On October 2, 1995, Circuit Judge Sally Greenhaw wrote to Mr. Fisher, "The Summons and Complaint have not been served in the above styled case. The Plaintiff shall respond within ten days of the court's letter, or the case will be dismissed." A copy was sent to "P.O. Box 1667, Mont. 36102, 832-4950." The record does not show where this address came from or the identity of the intended addressee. A docket entry dated October 3, 1995, reflected the letter as an "Order." On October 12, 1995, Mr. Fisher responded with his own letter, stating, "This will confirm our telephone conversation of this date with the Clerk in which we advised that the above referenced case has been removed to Federal Court by the Defendants (sic)." On February 22, 1996, Circuit Judge Eugene Reese entered an order setting the case for a "STATUS/SCHEDULING" conference at 2:00 p.m. on March 20, 1996. Copies of the order were sent to "Samuel Fisher" and "BMI Refractories, 220 Greenleaf Dr., Montgomery, AL 36108." There is a handwritten note on one copy of the order which states, "Peg called & talked w/ law clerk & she said disregard the notice. 3/R/98." A docket entry dated February 22, 1996, reflects the entry of this order. On March 12, 1996, "Vonda McLeod," apparently an employee of Judge Reese, communicated by facsimile to Mr. Fisher's office, "Peggy this case is currently on our pending list here in Mtgy. Circuit Court. We have no notice of removal in our office, the Circuit Clerks (sic) office or the court file. Please advise!" The next document in the record submitted to this court is entitled "Application, Affidavit, and Entry of Default and Default Judgment," which was submitted by Mr. Fisher to the court in Montgomery. Under oath, Mr. Fisher stated: "That the defendant was served with a copy of the Statement of Claim or Complaint on (date) August 3, 1995.... [and] has failed to answer or otherwise defend itself against the plaintiff's (sic) claim in this case (although a defective removal was attempted on September 1, 1995.)" On April 10, 1996, there was a letter from Peggy B. Turner as "Secretary to Samuel Fisher" to Debra P. Hackett at the Montgomery court in which she stated, "Pursuant to my telephone conversation with Vonda in Judge Reese's office, please find enclosed a copy of the summons in the above referenced 770 case, showing that service was perfected on August 3, 1995. It is my understanding that your office does not have a copy of this summons." Judge Reese entered a default judgment against the defendant on May 9, 1996, and set a hearing on damages for May 29, 1996, at 11:00 a.m. Copies were sent to Samuel Fisher and "BMI Refractories, 268 Oxmoor Court, Birmingham, Al. 35209." C. Proceedings in the United States District Court. Following removal to this court on September 1, 1995, the parties have engaged in extensive litigation. A copy of the clerk's docket entries is attached to this opinion as Exhibit A. [Editor's Note: Exhibit A not included for purposes of publication] On October 18, 1995, the plaintiffs were allowed to amend their complaint. On November 29, 1995, counsel participated in a Rule 16(b) scheduling conference and an order setting a schedule was entered. On December 28, 1995, after receiving briefs from both sides, the court granted the defendant's motion for judgment on the pleadings as to one claim. The plaintiffs, through Mr. Fisher, filed a notice of appeal on January 25, 1996. On February 6, 1996, Mr. Fisher designated the record on appeal. The court referred the case to mediation on April 3, 1996; a mediator was selected; and the case was unsuccessfully mediated on June 3, 1996. Additionally, the parties have apparently engaged in trial preparations with a view toward an established trial date of November 12, 1996. The defendant filed its motion to stay the state court proceedings at 5:05 p.m. on Wednesday, May 22, 1996, alleging that it had "discovered [Judge Reese's] May 9, 1996, order by accident when one copy was forwarded to it from a former Jefferson County Address." As noted earlier, Judge Reese had set the damages hearing for 11:00 a.m. on Wednesday, May 29, 1996. Intervening between the filing of the motion and the scheduled hearing was Friday, May 24, when the court was scheduled to be out of town; the weekend; and Monday, May 27, 1996, the Memorial Day holiday. The court conducted a hearing on the motion at 1:30 p.m. on Thursday, May 23, 1996. At no time before the defendant's motion to stay was filed did plaintiffs' counsel undertake to inform the court that this action was claimed to have remained pending in the Circuit Court of Montgomery County, Alabama. This court's jurisdiction was never questioned by motion to remand or otherwise until the hearing of May 23, 1996. The defendant claims, and Mr. Fisher does not deny, that Mr. Fisher never informed defendant's counsel that proceedings were ongoing in Montgomery, even though he was aware that the defendant was represented by the attorney who filed the motion to stay. III. Discussion. A. Removal Jurisdiction. In the face of Mr. Meelheim's affidavit and a stamped and dated copy of the notice of removal, Mr. Fisher insists that defendant's counsel did not effectively remove the action to this court because notice of the removal was not given to the state court as required by 28 U.S.C. § 1446(d). As noted above, the record evidence is that the notice was filed in the Circuit Court of Jefferson County, Alabama, the court from which the summons and complaint issued. He asserts that after investigation, he reached the conclusion that the action had not been properly removed and that jurisdiction remained in the state court. With respect to Mr. Fisher, that claim is simply not credible. The action was removed to this court on September 1, 1995. The plaintiffs did not within thirty (30) days, or at any time, move the court to remand the action to any state court, either in Jefferson County or Montgomery County. A motion to remand based upon a claimed defect in removal must be filed within thirty (30) days "after the filing of the notice of removal." 28 U.S.C. § 1447(c). A motion to remand for want of subject matter jurisdiction may be made at any time before entry of final judgment. Id. Failure to move for remand within the allotted time will work a waiver of any procedural defect in the removal. Leininger v. Leininger, 705 F.2d 727 (5th Cir.1983); 771 Fontenot v. Global Marine, Inc. 703 F.2d 867 (5th Cir.1983). Even if the plaintiffs were correct in arguing that the defendant failed to serve the state court with the notice required by 28 U.S.C. § 1446(d), it would avail them nothing. The failure to file a copy of the removal notice with the clerk of the state court is but a procedural defect that will not defeat the federal court's jurisdiction. Dukes v. South Carolina Insurance Company, 770 F.2d 545 (5th Cir.1985); Adair Pipeline Co. v. Pipeliners Local Union No. 798, 203 F. Supp. 434 (S.D.Tex.1962), aff'd, 325 F.2d 206 (5th Cir. 1963); see also Covington v. Indemnity Insurance Co., 251 F.2d 930, 933 (5th Cir.) (citing Mackay v. Uinta Development Co., 229 U.S. 173, 33 S. Ct. 638, 57 L. Ed. 1138 (1913)), cert. denied, 357 U.S. 921, 78 S. Ct. 1362, 2 L. Ed. 2d 1365 (1958); 14A Wright, Miller & Cooper, Federal Practice and Procedure § 3736, at 548 (1985). The circumstances here are similar to those present before the Fifth Circuit Court of Appeals in Dukes. The plaintiffs in Dukes filed a claim on an insurance contract in a Mississippi state court. The defendant insurance company filed a removal petition and bond in the United States District Court on November 5, 1982, and notified the plaintiffs of the removal. It claimed that it sent a copy of the removal petition to the state court clerk. Similarly to the situation here, the state court record did not show the copy of the petition was received. The defendant there, as here, was unaware of the procedural defect in the removal procedure and answered the complaint in the federal court. Thereafter, both sides participated in proceedings in the district court. On July 20, 1984, the Mississippi state court entered a default judgment. As here, counsel for the defendant were not given notice that the plaintiffs would seek a default judgment. Subsequently, the federal district court, never having been advised of the state court default, granted the defendant's motion for summary judgment. The plaintiffs then advised the district court of the state court judgment and moved for reconsideration of the federal court judgment. When the motion for reconsideration was denied, they appealed. As do the plaintiffs here, the plaintiffs in Dukes contended that the defendant's failure to comply strictly with the notice requirement of 28 U.S.C. § 1446(e) (now 1446(d)) resulted in the state court retaining concurrent jurisdiction with the federal court. The Fifth Circuit Court of Appeals did not agree. Because the circumstances are so similar and the opinion of the Fifth Circuit persuasive, the court quotes from that opinion in extenso. Dukes and Barber correctly state that the procedure for removal of an action to a federal court is governed by 28 U.S.C. § 1446, and that section 1446(e) requires the defendant to give prompt written notice of the removal to all adverse parties and to file a copy of the petition with the state court clerk. The summary judgment record does not establish that such a copy was ever actually filed on the docket of the state court. The failure of [defendant] South Carolina to ensure that the clerk of the state court had actually received a copy of the petition for filing is partially responsible for the present jurisdictional confusion. If Dukes and Barber had objected, South Carolina could have corrected its defective removal by filing the petition with the state clerk or by explaining its failure to that court. In Medrano v. Texas, 580 F.2d 803 (5th Cir.1978), we held that the state court retains jurisdiction until the state court receives actual or constructive notice of the removal. Constructive notice in this case was accomplished by notice to counsel for Dukes and Barber and by their subsequent participation in the state court action. In the absence of proof that they failed in their duty as officers of the court to advise the state court of the removal before seeking a default judgment in that forum, we presume that they properly discharged their duty to the state court and advised the court of the removal and of their participation in the conduct of the federal litigation during the previous year. Cf. United States ex rel. Echevarria v. Silberglitt, 441 F.2d 225, 227 (2d Cir.1971) (handing 772 petition to the state court judge is sufficient compliance with the filing requirement). * * * * * Dukes and Barber received notice of the removal and participated in the federal court litigation. They responded to interrogatories and attended a status conference before the federal magistrate. They took a default judgment in the state court while simultaneously participating in the federal forum. They failed to notify the federal court of South Carolina's removal defect until nearly two years after the removal, and did not inform the federal court of the state court judgment until after the federal court had reached a judgment on the merits. Although we decline to presume that Dukes and Barber attempted to mislead the state and federal courts to gain unfair advantage over South Carolina by proceeding surreptitiously in the state court, the record is clear that South Carolina did rely on the participation of Dukes and Barber in the federal forum, and had no reason to know that the state court litigation continued to exist. By failing to make a timely objection to the removal, Dukes and Barber waived their right, if any they ever had, to insist that the federal court was bound to defer to the state court's jurisdiction in the adjudication of their rights. See Grubbs v. General Electric Credit Corp., 405 U.S. 699, 703, 92 S. Ct. 1344, 1348, 31 L. Ed. 2d 612 (1972) (quoting Mackay, 229 U.S. at 176-77, 33 S. Ct. at 639); Petty v. Ideco, 761 F.2d 1146, 1148 n. 1; (5th Cir.1985) Parks v. Montgomery Ward & Co., 198 F.2d 772, 773-74 (10th Cir. 1952). Cf. Murray v. Ford Motor Co., 770 F.2d 461 (5th Cir.1985) (state court default judgment set aside by federal court under Rule 60(b)). Dukes, 770 F.2d at 548. Here, unlike in Dukes, the court has found that the notice of removal required by 28 U.S.C. § 1446(d) was, in fact, filed with the clerk of the Jefferson County Circuit Court. Accordingly, that court was placed on notice that it no longer had jurisdiction to proceed. Without doubt, Mr. Fisher was aware of the removal and his knowledge constituted constructive notice to the state courts, both in Jefferson and Montgomery counties, that the case had been removed. Furthermore, Mr. Fisher's letter to Judge Greenhaw dated October 12, 1995, constituted actual notice to that court that it no longer had jurisdiction to proceed. See Medrano v. Texas, 580 F.2d 803, 804 (5th Cir.1978) (Either constructive or actual notice to state court is sufficient to terminate that court's jurisdiction.); In re Marriage of Pardee, 408 F. Supp. 666, 667 (C.D.Cal.1976) ("The purpose of the requirement that a copy of the petition for removal be promptly filed with the state court ... is to inform the state court that it has no jurisdiction to further proceed until the federal court determines the existence vel non of federal jurisdiction.") From the facts found here and the law applicable to those facts, two things are clear. First, this court acquired jurisdiction of all matters in this case when the removal notice was filed on September 1, 1995. Second, the state courts were deprived of jurisdiction, probably when the notice of removal was filed in the Circuit Court of Jefferson County, Alabama, and Mr. Fisher received the notice of removal shortly after September 1, 1995, and without question when he informed Judge Greenhaw by letter on October 12, 1995, that the case had been removed. Moreover, if Mr. Fisher had retained any doubt concerning the propriety of the removal or the jurisdiction of this court, a mere modicum of research should have disabused him of any such notion.[4] By separate order, the court will request that the Circuit Court of Montgomery County, Alabama, transmit all papers and documents in its file to the clerk of this court to be included in the file of this action. B. The Conduct of Plaintiffs' Counsel. The court must now consider whether plaintiffs' counsel has, by his conduct, "multiplie[d] the proceedings ... unreasonably and 773 vexatiously," and whether he should be sanctioned under the terms of 28 U.S.C. § 1927. Sadly, the court has determined that he has and that it is required to address his conduct by the imposition of sanctions. Title 28, United States Code, section 1927 provides: Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct. Moreover, the court retains an even broader inherent power derived from the common law to impose attorney fees and costs against an attorney who conducts litigation in bad faith. Chambers v. NASCO, Inc., 501 U.S. 32, 44, 111 S. Ct. 2123, 2132-33, 115 L. Ed. 2d 27 (1991). There has been little litigation in the Eleventh Circuit concerning the proper standard for application of the costs shifting provisions of § 1927. Cases from other circuits, some from the old Fifth Circuit that are binding on this court, provide sufficient guidance to permit the court to determine the issues. The statute, being penal in nature, must be strictly construed. Monk v. Roadway Express, Inc., 599 F.2d 1378, 1382 (5th Cir.1979), aff'd, Roadway Express, Inc. v. Piper, 447 U.S. 752, 100 S. Ct. 2455, 65 L. Ed. 2d 488 (1980); Indianapolis Colts v. Baltimore, 775 F.2d 177, 182 (7th Cir.1985). Some circuits have required a finding of objective bad faith on the part of counsel before invoking § 1927. MGIC Indem. Corp. v. Moore, 952 F.2d 1120, 1122 (9th Cir.1991), But see, T.W. Electrical Service, Inc. v. Pacific Electrical Contractors Assoc., 809 F.2d 626, 638 (9th Cir.1987) (Costs may be imposed under § 1927 only upon a showing that the attorney acted recklessly or in bad faith.); West Virginia v. Chas. Pfizer & Co. 440 F.2d 1079, 1092 (2d Cir.), cert. denied sub nom., Cotler Drugs, Inc. v. Chas. Pfizer & Co., 404 U.S. 871, 92 S. Ct. 81, 30 L. Ed. 2d 115 (1971). Other courts have permitted sanctions upon a finding that counsel acted unreasonably. Braley v. Campbell, 832 F.2d 1504, 1510 (10th Cir.1987). Here, under either an intentional, a bad faith, or an unreasonable conduct standard, the court is satisfied that Mr. Fisher's conduct is deserving of sanctions and that the court has a duty to address that conduct. A lawyer owes a duty of complete candor to the court. Blackwell v. Department of Offender Rehabilitation, 807 F.2d 914 (11th Cir.1987) (Lawyer had affirmative duty when filing attorney fee petition to inform court that settlement agreement had addressed that issue.) All attorneys, as "officers of the court," owe duties of complete candor and primary loyalty to the court before which they practice. An attorney's duty to a client can never outweigh his or her responsibility to see that our system of justice functions smoothly. This concept is as old as common law jurisprudence itself. In England, the first licensed practitioners were called "Servants at law of our lord, the King" and were absolutely forbidden to "decei[ve] or beguile the Court." In the United States, the first Code of Ethics, in 1887, included one canon providing that "the attorney's office does not destroy ... accountability to the Creator," and another entitled "Client is not the Keeper of the Attorney's Conscience." Malautea v. Suzuki Motor Company, Ltd., 987 F.2d 1536, 1546 (11th Cir.), cert. denied, 510 U.S. 863, 114 S. Ct. 181, 126 L. Ed. 2d 140 (1993). The court must accept the disagreeable but necessary task of concluding that Mr. Fisher has knowingly and intentionally failed of his duty to this court. For some nine months Mr. Fisher participated in the proceedings in this court in what was seemingly the usual and customary way. From at least early October of 1995 he was aware that the Circuit Court of Montgomery County, Alabama, continued to assert jurisdiction of this matter. Though making some ineffectual efforts to inform that court that the action had been removed to this court, he took no formal steps to stop the proceedings there. Worse, on or about March 14, 1996, he filed an application for default in the state court in 774 which he stated, "That the defendant was served with a copy of the Statement of Claim or Complaint on (date) August 3, 1995.... [and] has failed to answer or otherwise defend itself against the plaintiff's (sic) claim in this case (although a defective removal was attempted on September 1, 1995.)" The statement that the defendant "has failed to answer or otherwise defend" could have been true only if "this case" referred to the proceedings in state court and no others. Yet, "this case" described exactly the same proceeding that was then, and is now, pending in this court. There was only one case and whether jurisdiction was in this court, in the circuit court as Mr. Fisher professes to believe, or concurrently in both courts, the statement that the defendant "has failed to answer or otherwise defend" was untruthful and was known by Mr. Fisher to be untruthful when it was made.[5] Contrary to Mr. Fisher's assertion in support of his request for default, the defendant has consistently and vigorously defended itself against the plaintiffs' claims and Mr. Fisher knew that it had done so. Counsel for the plaintiffs has stated both at the hearing and in a written declaration filed in this court that he had undertaken steps to bring the situation to the attention of this court. He states in his declaration, "At the time I received notice of last week's hearing on defendant's motion for a stay, my office was well involved in legal research in anticipation of filing a motion with this Court to correct the predicament created by the defendant BMI." Yet, the record is that from September 1, 1995, to May 23, 1996, Mr. Fisher appeared personally before this court on one or more occasions, filed numerous pleadings or other documents in the case, appealed a decision dismissing one claim, engaged in discovery, and participated in mediation and, until the defendant filed its motion to stay, never took any action at all to inform this court or, presumably the Eleventh Circuit Court of Appeals, that he was continuing to litigate this case in a state court.[6] A telephone call to defendant's counsel, a motion in this court, or a motion in the state court by Mr. Fisher would have avoided the need for the motion to stay and the attorney fees and costs incurred by the defendant in conjunction with the motion. IV. Conclusion. In accord with this opinion, the court will by separate order: (1) stay all proceedings in the Circuit Court of Montgomery County, Alabama, in connection with this case; (2) direct the clerk of the Circuit Court of Montgomery County, Alabama, to forward all documents, dockets entries, and a bill of costs to the clerk of this court; (3) require Samuel Fisher and his law firm, Gordon, Silberman, Wiggins and Childs, to pay the attorney fees and other costs incurred by the defendant in prosecuting the motion to stay; and (4) direct the clerk, in addition to the usual service list, to forward a certified copy of this opinion and order to the Honorable Eugene Reese, the managing partner at the firm of Gordon, Silberman, Wiggins and Childs, and to the General Counsel of the Alabama State Bar *775 Association.[7] ORDER In accord with the Memorandum of Opinion entered contemporaneously herewith, it is hereby ORDERED, ADJUDGED and DECREED: 1. Proceedings in the case of Peterson, et al. v. BMI Refractories, Inc., CV-95-1806-GR in the Circuit Court of Montgomery County, Alabama, are stayed until and unless the action is remanded by this court; 2. The Clerk of the Circuit Court of Montgomery County, Alabama, is directed and ordered to transmit all appropriate files and records in CV-95-1806-GR to the clerk of this court, together with a bill of costs; 3. Counsel for the plaintiffs Samuel Fisher and the law firm of Gordon, Silberman, Wiggins and Childs are ordered to pay all attorney fees and costs incurred by the defendant in the prosecution of its motion to stay; 4. Counsel for the defendant, within ten (10) days, shall file a sworn itemized statement of account showing all fees and costs incurred by the defendant in the prosecution of this motion; 5. Counsel for the plaintiffs may, within ten (10) additional days, contest the amount but not the fact of such fees and costs, by brief, motion, or otherwise; 6. In addition to the usual service list, the clerk of the court shall cause certified copies of the opinion and of this order to be served upon the Honorable Eugene Reese, the managing partner of the law firm of Gordon, Silberman, Wiggins and Childs, and the General Counsel of the Alabama Bar Association. NOTES [1] In the order entered following the earlier hearing on this matter, the court directed that the parties would file additional briefs to address certain questions following findings of facts to be entered by the court. In the intervening period, the plaintiffs have filed a supplemental response to the defendant's motion to stay and the defendant has replied to that response. The court is satisfied that the issues have been adequately addressed and the motion is ripe for decision. For that reason, that part of the previous order that required additional briefing is vacated. [2] In her cover letter transferring the case to Montgomery, the Jefferson County clerk included a list of "ORIGINAL PAPERS AND DOCUMENTS PERTAINING TO SAID CAUSE." Listed there was the plaintiffs' "Oral motion to transfer." Mr. Fisher denied at the hearing that he sought the transfer to the Montgomery County Circuit Court. He states, instead, that it was Judge Thorn who first proposed to transfer the case and that he, Mr. Fisher, argued in opposition to the transfer. [3] This document provides the basis for a major point of contention between the parties with regard to the present motion. Mr. Fisher, representing the plaintiffs, contends that no such notice was filed with the state court clerk as is required by 28 U.S.C. § 1446(d) which provides, "Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court." The copy of the notice which was filed in this court bears the filing stamp of the clerk of the Circuit Court of Jefferson County. There is no docket entry, either in Jefferson County or Montgomery County to reflect that the notice was filed. On the other hand, Mr. Meelheim, who no longer represents the defendant, has provided his affidavit in which he swears that the notice was filed. The court is satisfied, upon all the available evidence, that the notice was in fact filed in Jefferson County as required by the statute. Experience suggests that the original notice was somehow lost in the unusual circumstances in which it was filed in a court from which the case had already been transferred to another state court. The precise reason why the notice does not appear in the court record or on either docket sheet is immaterial. The court is satisfied that it was filed in the only court of which the defendant had any knowledge in connection with the case. [4] The law clerk who has assisted the undersigned in the research and preparation of this opinion has stated that he spent less than ten minutes in a Westlaw session to locate the Dukes case. [5] Furthermore, inclusion of the parenthetical statement that a "defective" attempt at removal had been made might have misled the state court judge to believe that the federal district court had found the removal to be "defective." Any such implication, of course, would have been untrue. [6] Apparently based upon documents from the Circuit Court of Montgomery County that suggest copies were mailed to the defendant, Mr. Fisher asserts that the defendant was aware of the circumstances and has somehow acted improperly. The evidence on that point is that on the original complaint Mr. Fisher listed the defendant's address as "B.M.I. Refractories, Inc., 268 Oxmoore Court, Birmingham, Al. 35209." On April 25, 1995, he caused an alias summons to issue upon which the address was shown as "BMI Refractories, Inc., 4120 Wall Street, Montgomery, Alabama 36106." The alias summons was returned unserved with the notation that "BMIR Inc. Not agent." The letter from Judge Greenhaw was sent to "P.O. Box 1667, Mont. 36102, 832-4950." Judge Reese's order of February 22, 1996, was sent to "BMI Refractories, 220 Greenleaf Dr., Montgomery, Al. 36108." Finally, the order setting the damages hearing was sent to "BMI Refractories, 268 Oxmoor Court, Birmingham, Al. 35209." This latter address is the only one which the evidence suggests was associated with this defendant and, when the notice was sent to that address, the defendant responded with the motion to stay. [7] See Woods v. Covington County Bank, 537 F.2d 804, 810 (5th Cir.1976) ("[A] District Court is obliged to take measures against unethical conduct occurring in connection with any proceeding before it.").	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1470230/	897 F.Supp. 1472 (1995) RAYLE TECH, INC., d/b/a Callaway Farms, Inc., Plaintiff, v. DEKALB SWINE BREEDERS, INC., Defendant. Civ. A. No. CV194-072. United States District Court, S.D. Georgia, Augusta Division. July 6, 1995. 1473 David E. Hudson, Hull, Towill, Norman & Barrett, Augusta, GA, for Rayle Tech, Inc. Thomas William Tucker, Dye, Tucker, Everitt, Wheale & Long, Augusta, GA, Charles T. Patterson, Eidsmoe, Heidman, Redmond, Fredregill, Patterson & Schat, Sioux City, IA, for DeKalb Swine Breeders, Inc. ORDER BOWEN, District Judge. Before the Court in the above-captioned case is Defendant DEKALB Swine Breeders, Inc.'s Motion for Summary Judgment (Mar. 17, 1995). For the reasons discussed below, DEKALB's Motion is GRANTED. I. Factual Background[1] At all times relevant to this dispute, Plaintiff, Rayle Tech, Inc., d/b/a Callaway Farms, Inc. ("Callaway"), maintained a rather large swine breeding herd in Wilkes County, Georgia. Callaway's herd contained approximately 5000 sows. Defendant DEKALB Swine Breeders, Inc. ("DEKALB") is in the business of raising and selling swine breeding stock. Callaway, which regularly introduces new breeding stock into its herd, began purchasing boars and sows from DEKALB in 1989. From 1989 through 1994, the parties executed numerous written contracts documenting Callaway's purchase of breeding stock from DEKALB. Each contract states that "[t]his contract shall be governed by the laws of the State of Illinois." (Stip., Exhibit A, ¶ 7.) The contracts in question, attached to the parties' Stipulation of Facts as Exhibits A, B, C, D, E and F, contain limited fertility warranties but disclaim liability in connection with disease. The contracts state in blocked, bold letters: "DEKALB cannot and does not guarantee the absence of any pathogens or disease in the breeding stock sold by DEKALB. Pathogens or diseases may be present at the time of sale or may appear later." (Stip., Exhibit A, ¶ 10.) The contracts further provide that replacement of the swine is the buyer's sole and exclusive remedy. 1474 Each contract contains the following merger provision: "[t]his Contract supersedes all prior written or oral agreements related to the swine sold hereunder, and this contract cannot be amended except in a writing which refers to this Contract and which is signed by both parties." The contracts also provide a blank for the purchaser to state any promises or representations made by the seller not otherwise specified in the contract; in five of the six contracts, Eugene Callaway, Jr., an officer of Callaway, wrote "none" in the blank. Porcine Reproductive and Respiratory Syndrome (PRRS) is a serious viral pig disease. In sows, PRRS may cause abortions, stillborns, and birth of underweight and defective pigs. PRRS is highly contagious. It can be contracted from infected animals introduced into the herd and from semen of boars used for breeding. At the time they executed the contracts of sale at issue here, the parties had not discussed PRRS. In the last half of 1992 and the first part of 1993, DEKALB knew that its herds had either been infected with or exposed to PRRS.[2] Callaway's herds tested negative for PRRS in March 1993. To protect its herds, Callaway decided not to purchase breeding animals which had been exposed to PRRS. In late 1992 and early 1993, Callaway considered changing from DEKALB to a different supplier of genetic breeding stock but declined to do so when it learned that the other supplier, Pig Improvement Company, had tested positive for PRRS in its farms. In the latter part of 1992, Callaway explained to DEKALB's sales personnel that Callaway wanted to avoid PRRS and that it was reluctant to change suppliers because DEKALB's herds were PRRS free and Pig Improvement's were not. A DEKALB salesman (Clinton Day) replied: "Well, that is a pretty good reason to stay with us." (Stip., ¶ 2(h).)[3] On March 11, 1993, Callaway received nineteen boars and gilts from DEKALB. The animals had no clinical signs of PRRS at the time they were shipped or when they were delivered on March 11, 1993. (Stip., ¶ 2(o).) On April 9, 1993, Callaway's herds broke with the PRRS virus. Callaway alleges that DEKALB's shipment of diseased animals was, under the circumstances, fraudulent. After the delivery of the swine which Callaway alleges infected its herds with PRRS, Callaway continued to accept new deliveries of swine from DEKALB. (Stip., ¶ 2(z).) Callaway seeks consequential damages in excess of $2,000,000. II. Analysis A. Summary Judgment Standard The Court should grant summary judgment only if "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The applicable substantive law identifies which facts are material in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). "The movant bears the initial burden to show, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991). When the moving party has the burden of proof at trial, that party must carry its burden at summary judgment by presenting evidence affirmatively showing that, "on all the essential elements of its case ..., no reasonable jury could find for the non-moving party." United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir.1991) (en banc). When the non-moving party has the burden of proof at 1475 trial, the moving party may carry its burden at summary judgment either by presenting evidence negating an essential element of the non-moving party's claim or by pointing to specific portions of the record which demonstrate that the non-moving party cannot meet its burden of proof at trial, see Clark, 929 F.2d at 606-08 (explaining Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)); merely stating that the non-moving party cannot meet its burden at trial is not sufficient, Clark, 929 F.2d at 608. Any evidence presented by the movant must be viewed in the light most favorable to the non-moving party. Adickes, 398 U.S. at 157, 90 S.Ct. at 1608. Ifand only ifthe moving party carries the initial burden, then the burden shifts to the non-moving party "to demonstrate that there is indeed a material issue of fact that precludes summary judgment." Clark, 929 F.2d at 608. The non-moving party cannot carry its burden by relying on the pleadings or by repeating conclusory allegations contained in the complaint. Morris v. Ross, 663 F.2d 1032, 1033-34 (11th Cir. 1981), cert. denied, 456 U.S. 1010, 102 S.Ct. 2303, 73 L.Ed.2d 1306 (1982). Rather, the non-moving party must respond by affidavits or as otherwise provided in Fed.R.Civ.P. 56. "[T]he evidence of the non-movant 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. A genuine issue of material fact will be said to exist "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. at 248, 106 S.Ct. at 2510. The clerk has given the non-moving party notice of the summary judgment motion, the right to file affidavits or other materials in opposition, and of the consequences of default; thus, the notice requirements of Griffith v. Wainwright, 772 F.2d 822 (11th Cir. 1985), are satisfied. The time for filing materials in opposition has expired, and the motion is ripe for consideration. The Court will proceed to review the applicable substantive law and inquire whether the moving partyand, if necessary, the non-moving partyhas carried its burden as set forth above. See Clark, 929 F.2d at 609 n. 9. B. Summary Judgment in this Case Callaway seeks to recover under two separate Illinois statutes and under the Georgia common law of fraud. 1. Illinois Statutory Claims Each of the contracts provides that "[t]his Contract shall be governed by the laws of the State of Illinois." (Stip., Exhibit A, ¶ 7.) Relying upon this clause, Callaway alleges causes of action for violations of two Illinois statutes: the Illinois Diseased Animal Act, Ill.Ann.Stat. ch. 510, § 50/24 (Smith-Hurd 1995), and the Illinois Consumer Fraud Deceptive Business Practices Act, Ill.Ann.Stat. ch. 815, § 505/2 et seq. DEKALB argues that only matters of contract interpretation are governed by Illinois law and that Callaway must rely upon the law of the state of Georgia for any tort claim. A federal court sitting in diversity must apply the forum state's choice of law rules. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941). In contract actions, Georgia courts apply the traditional lex loci contractus rule: a contract is governed as to its nature, validity and interpretation by the law of the state where the contract was made, unless it appears from the contract itself that the contract was to be performed in another state. General Telephone Co. of Southeast v. Trimm, 252 Ga. 95, 311 S.E.2d 460 (1984). "The traditional method of resolving choice-of-law issues is through a tripartite set of rules, which are lex loci contractus, lex loci delicti, and lex fori. Under the rule of lex loci contractus, the validity, nature, construction, and interpretation of a contract are governed by the substantive law of the state where the contract was made, except that where the contract is made in one state and is to be performed in another state, the substantive law of the state where the contract is performed will apply. [Cit.] Under the law of lex loci delicti, tort cases are governed by the substantive law of the state where the tort was committed. [Cit.] Under the rule of 1476 lex fori, procedural or remedial questions are governed by the law of the forum, the state in which the action is brought. [Cit.]" Lloyd v. Prudential Securities, Inc., 211 Ga. App. 247, 248, 438 S.E.2d 703 (1993) (quoting Fed. Ins. Co. v. Nat. Distrib. Co., 203 Ga. App. 763, 765, 417 S.E.2d 671 (1992)). Although Georgia courts follow the rule of lex loci contractus, parties can stipulate that another jurisdiction's law will apply. Velten v. Regis B. Lippert, Intercat, Inc., 985 F.2d 1515, 1519 (11th Cir.1993). The parties in this case agreed that the law of Illinois would govern the contracts. Consequently, any action for breach of a duty under one of the contracts will be governed by Illinois law. The parties' agreement to displace the Georgia law of contracts does not, however, displace other applicable Georgia law. Under lex loci delicti, "[t]he place of the wrong is the jurisdiction where the harm was suffered or where the last event necessary to make an actor liable for the alleged tort takes place." Velten, 985 F.2d at 1521. Callaway alleges that it sustained damages in the state of Georgia, and the integration of the hogs into Callaway's herd occurred in Georgia. Under lex loci delicti, Georgia law will govern any tort claim brought by Callaway against DEKALB. Neither of the Illinois acts relied upon by Callaway is applicable. 2. Fraud Under Georgia Common Law To succeed on a claim of fraud in Georgia, a plaintiff must establish five elements: (1) a false representation by a defendant; (2) scienter; (3) intention to induce the plaintiff to act or refrain from acting; (4) justifiable reliance by the plaintiff; and (5) damage to the plaintiff. Copeland v. Home Savings of America F.A., 209 Ga.App. 173, 174, 433 S.E.2d 327 (1993). Callaway argues that the statement by Mr. Day was a false representation upon which it relied in deciding to stay with DEKALB as its source of breeding stock. Because Callaway's alleged reliance was not justified, however, DEKALB is entitled to summary judgment on Callaway's fraud claim. Any reliance by Callaway upon Day's statements was unjustified in light of the clearly written contracts. All of the written contracts provide, in bold, capitalized print, that "DEKALB cannot and does not guarantee the absence of any pathogens or disease in the breeding stock sold by DEKALB. Pathogens or diseases may be present at time of sale or may appear later." (Stip., Exhibit A, ¶ 10.) Moreover, Callaway expressly accepted responsibility for "[t]he presence of any pathogen or disease including, but not limited to, those pathogens or diseases listed in the Pathogen and Disease Statement above." (Stip., Exhibit A, ¶ 11.) Callaway knew that the written contracts fully and completely reflected the agreement between the parties. All of the contracts contained a merger clause which read as follows: SOLE AND ENTIRE CONTRACT. THIS CONTRACT SUPERSEDES ALL PRIOR WRITTEN OR ORAL AGREEMENTS RELATED TO THE SWINE SOLD HEREUNDER AND THIS CONTRACT CANNOT BE AMENDED EXCEPT IN A WRITING WHICH REFERS TO THIS CONTRACT AND WHICH IS SIGNED BY BOTH PARTIES. (Stip., Exhibit A, ¶ 13.) Additionally, the Illinois Commercial Code provides that "[a] signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded...." Ill.St.Ann. ch. 810 § 5/2-209. Illinois' parol evidence rule also prevents Day's oral statements from modifying the contract.[4] 1477 The fact that the allegedly false statement by Day occurred after the entry of the contracts does not support a different outcome. Delivery invoices, signed by an agent of Callaway, provided that the warranties and remedies, if any, applicable to the swine being delivered, were determined by the contracts. The invoices further instructed Callaway to refer "to that contract for the warranties, exclusive remedies, and statements regarding the swine, including their fertility, disease and soundness[,]" and stated that "[a]cceptance of the swine here delivered is a reconfirmation of that contract and its terms." (Stip., Exhibit G.) In light of the unambiguous terms of the contracts, any reliance upon Day's statement by Callaway was unjustified. Chief Judge Sharp of the Northern District of Indiana reached a similar conclusion in a case addressing a fraud in the inducement claim brought by a plaintiff against DEKALB in his court. Quoting former Judge Ruth Bader Ginsburg, Judge Sharp stated that: Plaintiffs cannot overcome the written instrument here, and, particularly, the integration clause, by invoking the fraud-in-the-inducement exception to the parol evidence rule. The exception for a party who has been induced by a fraudulent misrepresentation to enter the contract, must not be stretched or inflated in a way that would severely undermine the policy of the parol evidence rule, which is grounded in the inherent reliability of a writing as opposed to the memories of contracting parties. We need not belabor the point. We have here the case of a party with the capacity and opportunity to read a written contract, who has executed it, not under any emergency, and whose signature was not obtained by trick or artifice; such a party, if the parol evidence rule is to retain vitality cannot later claim fraud in the inducement. Urschel Farms, Inc. v. Dekalb Swine Breeders, Inc., 858 F.Supp. 831, 840 (N.D.Ind.1994) (quoting One-O-One Enterprises, Inc. v. Caruso, 848 F.2d 1283 (D.C.Cir.1988) (citations and internal quotation omitted)). 3. Good Faith I am cognizant of the general duty of good faith placed upon the parties to a contract by Illinois' Commercial Code.[5] I am also mindful that good faith, as it applies to DEKALB in these transactions, means "honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade." Ill.Ann.Stat. ch. 810, § 5/2-103. I do not find that knowingly shipping diseased hogs to a breeding farm is consistent with reasonable commercial standards of fair dealing in the trade. A close reading of the contracts between the parties, however, establishes, beyond any doubt, that Callaway acknowledged and assumed the risk that the swine it purchased from DEKALB might carry certain pathogens such as PRRS. Moreover, the contracts gave Callaway the right to have DEKALB test the animals, at Callaway's expense, for pathogens or diseases prior to delivery and cancel the contract based upon the results of that test. (Stip., Exhibit A, ¶ 11.) Callaway, however, did not exercise its right to have the swine tested by DEKALB for PRRS. Further, Callaway continued to take delivery of swine from DEKALB after its herd had been infected. The clear language of the contract bristles with provisions dealing with the parties' rights in the event of disease. Paragraph 10 of the contracts, which occupies almost one quarter of the linear length of those documents, deals exclusively with pathogens and disease. It is unthinkable, given these provisions, that the parties' intent did not encompass the risk of disease. On the contrary, it is clear that Callaway and DEKALB recognized the risk of disease and allocated that 1478 risk between themselves. Callaway is a sophisticated party, and, under the facts of this case, the Court will not endeavor to rearrange the commercial relationship between Callaway and DEKALB which is so clearly set out in the contracts. A seemingly harsh result cannot be the excuse for dismantling the law. The parties are governed by their contracts. III. Conclusion For the reasons stated above, Defendant's Motion for Summary Judgment is GRANTED. The Clerk is ordered to ENTER JUDGMENT for the Defendant and CLOSE THE CASE, TAXING COSTS AGAINST PLAINTIFF. ORDER ENTERED. NOTES [1] The parties filed an admirable joint Stipulation of Facts which provides the factual basis for purposes of considering Defendant's Motion for Summary Judgment. By such reference the Stipulation is incorporated herein. The professionalism which resulted in the Stipulation saved the client-parties tens of thousands of dollars in fees and costs. [2] During 1992 and 1993, Dekalb received 829 positive blood tests for the PRRS virus. (Stip., ¶ 2(k).) In November of 1992, Dekalb observed clinical signs of the disease in one of its herds. Id. Clinical evidence of PRRS eventually appeared in eight of Dekalb's foundational farms. Id. Prior to March 11, 1993, two of Dekalb's customers complained that their herds were infected with PRRS by animals purchased from Dekalb. Id. [3] Dekalb admits, for purposes of its Motion for Summary Judgment, that Day made that statement and that, at the time he made that statement, Dekalb's herds were not PRRS free. [4] Illinois' parol evidence rule provides that: Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented (a) by course of dealing or usage of trade (Section 1-205) or by course of performance (Section 2-208); and (b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement. Ill.Ann.St. ch. 810 § 5/2-202 (emphasis added). Given the merger clause in the contracts, there can be no doubt that the parties intended the contracts to be a full and complete memorial of their agreement. [5] "Every contract or duty ... imposes an obligation of good faith in its performance or enforcement." Ill.Ann.Stat. ch. 810, § 5/1-203.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1409239/	200 Ga. App. 571 (1991) 409 S.E.2d 41 BATSON-COOK COMPANY v. AETNA INSURANCE COMPANY et al. A91A0178. Court of Appeals of Georgia. Decided May 28, 1991. Reconsideration Denied July 22, 1991. Glover & Davis, J. Littleton Glover, Jr., R. Keith Prater, for appellant. R. Patrick White, Fortson & White, Michael J. Rust, Beth H. Paradies, for appellees. COOPER, Judge. In 1980, appellant, Batson-Cook Company, was chosen by a Florida developer to provide construction management services on a project in Florida. The developer procured a comprehensive general liability insurance policy from Aetna Insurance Company ("Aetna"), which listed appellant as an additional insured. Appellant was also the named insured under a comprehensive general liability policy of insurance issued by Fireman's Fund Insurance Company ("Fireman's Fund"). In 1983, appellant was sued in a federal district court in Florida by one of the contractors on the project (the "federal action"). Appellant forwarded the complaint to Fireman's Fund and was subsequently informed by a Fireman's Fund claim supervisor that the complaint did not allege any matters for which coverage would be provided under the policy; therefore, Fireman's Fund would not defend the action on behalf of appellant. In 1984, an action was brought by another contractor against appellant and several other defendants in a Florida state court. Two of the defendants subsequently filed crossclaims against appellant. When several more civil actions were filed in Florida state courts involving claims arising out of construction management services rendered by appellant at the same project, all of the state court cases were consolidated into one action (hereinafter referred to as "the state action"). In December 1984, an attorney for appellant sent a letter to Fireman's Fund enclosing "copies of the various complaints pertaining to the litigation" and informing Fireman's Fund that "one or more of the allegations [in the complaints] was covered under [appellant's] insurance." In response, a Fireman's Fund agent informed appellant's attorney by letter that the allegations in the various complaints did not come within the scope of the 572 policy's coverage. In early 1985, appellant wrote to an agent for Aetna and requested copies of any policies which listed appellant as an insured for the purpose of making "an independent determination as to whether or not there is any available coverage." The agent's response was to inform appellant's attorney that appellant had already received copies of the Aetna policies. In March 1988, appellant filed an action against Aetna and Fireman's Fund, appellees herein, seeking damages for breach of contract resulting from the refusal of appellees to defend the above-mentioned lawsuits against appellant. Appellees answered the complaint, contending that appellant did not give timely notice of the claims against appellant and that none of the claims in the various complaints was covered by the insurance policies. After completing discovery, appellant filed a motion for partial summary judgment, and appellees filed cross-motions for summary judgment. The trial court denied appellant's motion and granted appellees' motions, finding as a matter of law that appellees had no duty to defend appellant under the policies of insurance. This appeal followed. This case first presents a choice of law question. The Aetna insurance policy was issued in Florida and contemplated coverage of appellant's activities in Florida. However, the Fireman's Fund policy was a general liability policy issued through its Atlanta agent and provided coverage for appellant's activities in a number of states in which appellant conducted business. This court has recognized that since insurance contracts often have no particular place where performance is contemplated, it is reasonable to apply the law of the place where the contract was made. General Elec. Credit Corp. v. Home Indem. Co., 168 Ga. App. 344 (2) (309 SE2d 152) (1983); see also Brown v. Inter-Ocean Ins. Co., 438 FSupp. 951, 953 (N.D. Ga. 1977). Therefore, the law of Florida will be used to construe the Aetna policy, and the law of Georgia will be used to construe the Fireman's Fund policy. Next, we must determine whether either the federal action or the state action alleged any claims against appellant within the scope of coverage of the Aetna or Fireman's Fund policies. An insurer's duty to defend is determined by comparing the allegations of the complaint with the provisions of the policy. See Great American Ins. Co. v. McKemie, 244 Ga. 84, 85 (259 SE2d 39) (1979); see also Commercial Union Ins. Co. v. R. H. Barto Co., 440 S2d 383, 385 (1) (Fla. App. 1983). We, therefore, must look to the complaints filed in the federal action and the state action and the applicable provisions of the respective insurance policies to determine whether a defense was required by either insurance company. The six-count federal action included three counts which alleged that appellant negligently performed its duties as supervisor of the 573 project, resulting in damages to the plaintiff for overhead and profit, additional costs of labor, materials and tools, additional job overhead and supervisory expenses, additional insurance expenses, loss of use of equipment, and additional costs of maintenance and repairs. Both the Aetna and Fireman's Fund policies provided coverage for "bodily injury or property damage, to which this insurance applies, caused by an occurrence.. . ." The policies also provided that the insurer had a "duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations in the suit are groundless, false or fraudulent." In each policy "property damage" was defined as: "(1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period," and "occurrence" is defined as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." "[T]he phrase `property damage' in liability insurance law has been the subject of construction in a variety of cases, all of which, under definitions substantially identical to the [ones involved in this case], have emphasized the tangible and physical nature of the property and the necessity for bringing it within physical three-dimensional limits." Southeastern Color Lithographers v. Graphic Arts Mut. Ins. Co., 164 Ga. App. 70, 71 (296 SE2d 378) (1982). See also Commercial Union Ins. Co. v. R. H. Barto Co., supra at 387. We conclude that the federal action did not allege any occurrence of property damage as contemplated by the terms of either policy. Although the complaint alleged a loss of use of equipment, it did not allege a loss of use of equipment which resulted from a physical injury to the equipment as is required to come within the definition of "property damage" in the policies. Therefore, we conclude that appellees had no duty to defend appellant in the federal action, and the trial court properly granted summary judgment to appellees. Upon review of the state action, we find that only paragraphs 39 and 42 of the complaint styled Sharsand Associates, Inc. v. Kessel Construction Co., et al., Civil Action No. 84-1692 B (hereinafter "Sharsand complaint"), alleged claims potentially covered by the policies. Those paragraphs allege that appellant breached its duties as construction manager by, among other enumerated items, "directing other contractors and subcontractors to use and move the swings and other equipment and materials rented by or belonging to plaintiff," causing plaintiff to incur expenses for rentals on idle equipment, compensation to idle laborers, additional start-up and resetting of *574 equipment, laborers and materials and for damage to swings and other equipment during periods of unauthorized use. . . ." Even if we conclude that paragraphs 39 and 42 together are a sufficient allegation of property damage covered by the policies, the insurer's duty to defend was not triggered because the damage alleged was excluded under the terms of both policies. Both policies contained an exclusion for "liability assumed by the insured under any contract or agreement." In addition, the Fireman's Fund policy contained an exclusion which provided that "the insurance does not apply to bodily injury or property damage arising out of the rendering of or the failure to render any professional services by or for the named insured, including (1) the preparation or approval of maps, plans, opinions, reports, surveys, designs or specifications and (2) supervisory, inspection or engineering services." The allegations contained in paragraphs 39 and 42 of the Sharsand complaint relate to appellant rendering or failing to render services as construction manager of the project pursuant to its agreement with the developer. Therefore, notwithstanding the issue of whether the allegations in paragraphs 39 and 42 of the Sharsand complaint alleged property damage which may have been included within the coverage of the policies, we find that the damages claimed in the state action fall within the exclusions contained in both insurance policies. Inasmuch as the allegations contained in the state action did not state a cause of action requiring appellees to defend appellant, summary judgment was properly granted to appellees. See Commercial Union Ins. Co. v. R. H. Barto Co., supra; see also Barge & Co. v. Employers &c. Ins. Co., 163 Ga. App. 573 (295 SE2d 851) (1982). Because of our ruling that the appellees had no duty to defend under either the federal or the state action, we need not address the issue of whether appellant provided Aetna or Fireman's Fund with timely notice as required under both policies. Judgment affirmed. Birdsong, P. J., and Pope, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2496702/	64 So.3d 1274 (2011) ALLEN v. STATE. No. 3D11-967. District Court of Appeal of Florida, Third District. May 25, 2011. DECISION WITHOUT PUBLISHED OPINION Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/3360886/	[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] MEMORANDUM OF DECISION By complaint dated March 1, 2001, the plaintiffs, Ann Pergola and Peter Delutrie, have commenced this action against the defendants, Carol and John Heuschkel, seeking back rental payments. By way of background, in 1992, by agreement, with the defendant Carol Heuschkel' s father, the defendants took possession of the premises known as Highland Park in Winsted, Connecticut. Heuschkel' s father died on December 18, 1999. The plaintiffs commenced a summary process action1, which was dismissed by the court on December 1, 2000. On December 15, 2000, the plaintiff initiated a subsequent summary process action2. On January 18, 2001, the parties entered into a judgment by stipulation where by the defendants agreed to pay, on February 1, 2001, $1,200 as rent due. The defendants paid the $1,200 for the month of February 2001. The plaintiff are now seeking from the defendants back rent for the months of September, October, November. December 2000 and January 2001 as well as attorney's fees, costs, interests and reasonable expenses. In their answer dated September 17, 2001, the defendants admitted that they have failed to make fair market rental payments for these months. The trial was held on May 3, 2002. The plaintiffs filed their memorandum of law on June 6 2002. The defendants filed their memorandum of law on June 24, 2002. The defendants contend that the plaintiffs are not entitled to the fair rental value of the property for those five months because there was no contractual relationship between the plaintiffs and the defendants as required by Connecticut law. "A tenancy at sufferance arises when a person who came into possession of land rightfully continues in possession wrongfully after his right thereto has terminated." O'Brien Properties, Inc. v. Rodriquez,215 Conn. 367, 372 (1990). The issuance of a notice to quit creates a tenancy at sufferance. Id. After a notice to quit has been served a CT Page 12540 tenant at sufferance does not have a duty to pay rent. Id. He is, however, obliged to pay a fair rental value in the form of use and occupancy for the dwelling unit." Id. "The obligation is one implied in law and, in this State, derives from Gunn v. Scovil, 4 Day 228 1810), in which the court held that an action of indebtitatus assumpsit could be supported on the implied promise, arising merely from use and occupation of real estate, and without an express promise to pay rent. The obligation is now embodied in General Statutes § 47a-3c." Hackbaarthv. Ross, Superior court, judicial district of New Haven, Housing Session, Docket No. 96-7800 (August 1997, Levin, J.). General Statutes § 47a-3c provides: "In the absence of agreement, the tenant shall pay the fair rental value for the use and occupancy of the dwelling unit." In this case, it is undisputed that there is no rental agreement between the parties. The plaintiffs here have purchased the property from the estate and subsequently initiated summary process actions in which the defendants were served with a notice to quit3. Here, the defendants had rightful possession to the property through the agreement between the defendants and the defendant Carol Heuschkel's father. Their possession, however, became wrongful once the plaintiffs, the subsequent landlord, served the defendants with the notice to quit, thereby, creating a tenancy at sufferance. Since the defendants are tenants at sufferance they are not obligated to pay rent but instead, are obligated to pay the fair market value of the dwelling unit. The defendants admitted in their answer that they have not paid the plaintiffs for the fair market rental payments for the months of September, October, November and December 2001 and January 2001. Therefore, the court concludes that the defendants are liable to the plaintiffs for the fair market value of the use and occupancy of the dwelling until for these five months. Under General Statutes § 47a-26b (c) "The last agreed-upon rent shall be prima facie evidence of the fair rental value of the premises. The party claiming a different amount shall have the burden of proving that the last agreed-upon rent is not the fair rental value." The parties, in their judgment by stipulation dated January 18, 2001, agreed that the fair market value of the rental payment was $1,200. Since no other evidence has been presented to dispute the fair market value of the rental payments, the court finds that the fair market rental payments should be $1,200. The plaintiffs also seek to recover attorney's fees. "It is axiomatic that attorney's fees are recoverable as an item of damages when allowed by statute or contract." Bushnell Plaza Development Corp. v. Fazzano,38 Conn. Sup. 683, 687 (1983). Here, there is no applicable CT Page 12541 The defendants are claiming a credit of $4,761.77 against any payments the court may find the defendants owe the plaintiffs. The credit the defendants contend is for various expenses that they paid to cover the costs of heat and utilities for the dwelling unit for the benefit of the plaintiffs. The total of the invoices presented as defendants' exhibits, however, totals $2,246.57. These expenses however, were for the benefit of the defendants and are therefore denied. The court enters judgment as follows: $6,000 ($1,200 per month) to be awarded to the plaintiffs. By the court, Gill, J.	01-03-2023	07-05-2016
https://www.courtlistener.com/api/rest/v3/opinions/1357452/	494 S.E.2d 38 (1997) 229 Ga. App. 336 HILLIARD et al. v. J.C. BRADFORD & COMPANY. No. A97A2223. Court of Appeals of Georgia. October 30, 1997. Reconsideration Denied November 13, 1997. Certiorari Denied February 20, 1998. 39 Ronald C. Berry, Savannah, for appellants. 40 Brennan & Wasden, Wiley A. Wasden III, James C. Joedecke, Jr., Savannah, for appellee. ELDRIDGE, Judge. This is an appeal from an order of the Chatham County Superior Court confirming an arbitration award in favor of the plaintiff, J.C. Bradford & Company ("Bradford"). Bradford is a Tennessee limited liability company authorized to do business in the State of Georgia as a licensed securities broker-dealer. The defendants, William L. and Diane L. Hilliard, held a margin account with Hanifen, Imhoff, Inc., which they transferred to Bradford. On June 22, 1994, at Bradford's Savannah, Georgia office, the Hilliards executed a securities margin agreement regarding their brokerage account with Bradford in order to facilitate such transfer. In such margin agreement, the Hilliards agreed that all controversies that arose between the Hilliards and Bradford regarding the Hilliards' brokerage account would be resolved by mandatory binding arbitration. The principal investment of the Hilliards in their margin account with Bradford was 110,500 shares of common stock of Beta Wells Service, Inc. ("Beta"), which at the time they opened their account and executed the margin agreement was listed on the American Stock Exchange. On October 21, 1994, the American Stock Exchange de-listed Beta from trading on the exchange. As a result of this announcement, the per share market price began to drop significantly, and Bradford issued an initial margin call of $454,337 to the Hilliards. The Hilliards failed to meet this margin call, as well as the margin calls subsequently issued by Bradford. Therefore, on October 25, 1994, pursuant to the terms of the margin agreement and following written notice, Bradford began to liquidate the securities held in the Hilliards' account. Bradford was able to liquidate all of the non-Beta securities in the Hilliards' account. Beta was re-listed on the American Stock Exchange in November 1994. Between November 1994 and September 11, 1995, Bradford was able to sell all but 43,000 shares of Beta at various prices ranging from $3.625 per share to as little as $2 per share. On February 1, 1995, Bradford filed a statement of claim with the Arbitration Department of the National Association of Securities Dealers, Inc. ("NASD"). On April 12, 1995, the Hilliards filed their statement of answer and counterclaim to Bradford's statement of claim. Both Bradford and the Hilliards signed a uniform submission agreement on April 12 and May 11, 1995, respectively, under which they agreed to arbitrate their dispute in accordance with the rules and procedure of the NASD. Bradford filed its reply to the counterclaim on July 18, 1995. The arbitrators heard evidence from the parties on December 14, 1995, and April 15 and 16, 1996. On May 9, 1996, the NASD issued its decision in this case, finding the Hilliards liable to Bradford for the sum of $260,049.17 plus interest and $12,750 in attorney fees. NASD denied the Hilliards' counterclaim and dismissed it in its entirety. On May 23, 1996, Bradford filed a motion to confirm the arbitration award in the superior court. In response to this motion, the Hilliards filed a petition for removal of this case to the United States District Court. On the same day, the Hilliards also filed their opposition to the motion to confirm in the United States District Court, as well as a cross-motion to vacate and/or modify the award. However, on motion of Bradford, this case was remanded to the Superior Court of Chatham County on July 26, 1996. On October 7, 1996, the trial court granted Bradford's motion to confirm the arbitration award after finding that the Hilliards had failed to file a timely answer. However, the Hilliards moved the trial court to vacate such order, claiming that they had filed a timely answer in the district court after the removal of the case. On November 13, 1996, the trial court entered a consent order vacating its order of October 7, 1996. On March 7, 1997, the trial court confirmed the arbitration award after both sides were given an opportunity for a hearing. It is from this order that the Hilliards have appealed. 41 In this case, where there has been no agreement by the parties to be bound by state arbitration law, and since the transaction involved commerce within the meaning of the Federal Arbitration Statute, the state law and policy with respect thereto must yield to the preemption of the paramount federal law. North Augusta Assoc. v. 1815 Exchange, 220 Ga.App. 790, 469 S.E.2d 759 (1996); see West Point-Pepperell v. Multi-Line Indus., 231 Ga. 329, 331, 201 S.E.2d 452 (1973); American Airlines v. Louisville, etc., Air Bd., 269 F.2d 811 (6th Cir.1959). The trial court is required by law to accept the arbitrator's findings of fact and may vacate the award only: (1) "[w]here the award was procured by corruption, fraud, or undue means"; (2) "[w]here there was evident partiality or corruption in the arbitrators"; (3) "[w]here 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"; or (4) "[w]here 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 USCA § 10(a). 1. In their first enumeration of error, the Hilliards allege that the trial court erred by excluding and/or failing to rule on the admissibility of relevant and material evidence at the hearing on Bradford's motion to confirm the arbitration award and the Hilliards' motion to vacate the arbitration award. (a) First, the Hilliards contend that the trial court erred by failing to admit various tapes of the arbitration proceedings into evidence. The Hilliards allege that they requested copies of the arbitration hearing tapes from NASD; that when they received the first set that it contained numerous inaudible sections and a 45-minute gap on tape 3B; that the second set requested contained the same problems; and that a final set contained the same problems, along with an additional 15 seconds missing from tape 3B. The Hilliards attempted to introduce these three sets of tapes that they claim they received from NASD into evidence at the confirmation hearing to show that the arbitration hearing tapes had been tampered with and substantial portions of the hearing were missing from the tapes. For sound recordings to be admissible into evidence in Georgia, a proper foundation must first be laid. It must be shown that the mechanical transcription device was capable of taking testimony; that the operator of the device was competent to operate the device; that changes, additions, or deletions have not been made; and that the testimony was elicited freely and voluntarily made, without any kind of duress. Further, the authenticity and correctness of the recordings must be established; the manner of preservation of the record must be shown; and the speakers must be identified. Central of Ga. R. Co. v. Collins, 232 Ga. 790, 209 S.E.2d 1 (1974); Steve M. Solomon, Jr., Inc. v. Edgar, 92 Ga.App. 207, 211-212, 88 S.E.2d 167 (1955). "Unless clearly erroneous, a trial court's findings as to factual determinations and credibility relating to admissibility will be upheld on appeal." (Citations and punctuation omitted.) Hall v. State, 176 Ga.App. 428, 429(1), 336 S.E.2d 291 (1985). The Hilliards failed to lay the evidentiary foundation for the admission of the tapes. Therefore, the trial court's ruling was not clearly erroneous. Further, in order to resolve any dispute the Hilliards had concerning whether the tapes had been tampered with, the trial judge requested and reviewed a certified set of tapes directly from the NASD. The certified tapes were properly admitted into evidence. Therefore, even if the trial court erred in failing to admit the copies of the tapes sent directly to the Hilliards, such error is harmless since the trial court had the entire arbitration hearing before it in the form of the certified tapes sent directly from NASD. See Travelers Ins. Co. v. Trans. State, 172 Ga.App. 763, 324 S.E.2d 585 (1984) (holding that any error by the trial judge in failing to admit a transcript was harmless as the transcript was cumulative of testimony already presented). (b) The Hilliards further argue that the trial court erred in failing to admit the affidavit 42 of Dr. Nelson at the confirmation hearing as evidence that the arbitrators failed to continue the portion of the arbitration hearing set for April 15, 1996, upon a showing of good cause. The trial court reserved ruling on the admission of Dr. Nelson's affidavit and ultimately confirmed the award without indicating a ruling on the affidavit's admissibility. Failure of the trial court to make a final ruling on a motion precludes our review of the motion on appeal. Metro Atlanta Trucking Co. v. Kyzer, 217 Ga.App. 630, 458 S.E.2d 416 (1995); Staggs v. Wang, 185 Ga. App. 310, 312, 363 S.E.2d 808 (1987); see Paulsen Street Investors v. EBCO Gen. Agencies, 224 Ga.App. 507, 508, 481 S.E.2d 246 (1997). It is the duty of trial counsel to invoke a final ruling on his motions to preserve the record for appellate review. Metro Atlanta Trucking Co. v. Kyzer, supra at 630, 458 S.E.2d 416; Staggs v. Wang, supra at 312, 363 S.E.2d 808. After the trial court entered its judgment confirming the arbitration award, the burden was then on the Hilliards to file some type of motion or action to invoke the trial court's ruling on the admissibility of Dr. Nelson's affidavit, such as a motion to set aside the judgment. However, the Hilliards failed to do so. Under these circumstances, there is nothing preserved for appellate review. (c) The Hilliards next assert that the trial court erred by failing to admit into evidence Mr. Hilliard's testimony outlining remarks made over the telephone to him by a NASD officer located in New York. The Hilliards sought to introduce such testimony as proof that the NASD office in New York felt it was appropriate for a continuance of the April 15, 1996 arbitration hearing to be granted, and therefore, the arbitrators were guilty of misconduct in refusing to postpone the hearing. We disagree, because such testimony was neither relevant nor material. In support of their claims, the Hilliards cite A Child's World v. Lane, 171 Ga.App. 438, 440, 319 S.E.2d 898 (1984). The facts of A Child's World are distinguishable from this case. In A Child's World, this Court held that "[s]ince each question sought to determine the factual existence of a communication between individuals and neither sought to elicit the contents of the communication as proof of the facts asserted therein, no hearsay was sought to be elicited thereby." (Citations and punctuation omitted.) Id. at 439, 319 S.E.2d 898. In contrast, the Hilliards attempted to introduce testimony of such conversation into evidence not to establish that a discussion took place, but rather to establish that the Hilliards had been told by the New York office of NASD that they should receive a continuance and that the arbitrators' denial of a continuance was unfair and prejudicial. See OCGA § 24-3-2. It is a well-established rule in Georgia that hearsay evidence is not admissible to prove the truth of the matter asserted, unless the offered evidence falls under one of the recognized exceptions to the general rule excluding hearsay. OCGA § 24-3-1 et seq. The Hilliards made no showing that they had attempted to procure the NASD officer's attendance at the hearing to confirm the arbitration award or that the testimony fell within one of the exceptions. Further, the communication that the Hilliards sought to introduce into evidence was not between Mr. Hilliard and one of the arbitrators, who had the authority to continue the arbitration hearing, but was with Mr. Jones, who was an administrator in the New York office and who, in addition to not having the authority to continue the hearing, was not privy to the case history. Therefore, any opinion that an administrator in the New York office may have had as to whether the arbitrators in Atlanta should continue the arbitration hearing would not be relevant and material to determine whether or not the arbitrators were guilty of misconduct in refusing to postpone the hearing. 2. The Hilliards further contend that the trial court erred by failing to vacate the arbitration award due to the alleged partiality of the arbitrators. Specifically, the Hilliards contend that (1) the arbitrators yelled and interrupted the Hilliards during the course of the arbitration; and (2) the arbitrators placed an impossible burden of proof on the Hilliards as to the market value of the Beta stock. 43 The party claiming partiality on the part of the arbitrators has the burden of proof in the confirmation proceedings. Saxis Steamship Co. v. Multifacs Intl. Traders, 375 F.2d 577 (2nd Cir.1967). Further, "[a]rbitrators are not obliged to apply strict rules of law in the matter at hand, when they act within the scope of their authority, unless the parties require adherence to such rules. In fact, it is stated that they may disregard the traditional rules of law. Accordingly, as a general rule, arbitrators are free to apply broad principles of justice and good conscience and decide according to their concept or notion of justice. They are still obliged, however, to be guided by the basic agreement of the parties. 6 CJS, [Arbitration,] § 70." (Punctuation omitted.) Bartlett v. Dimension Designs, 195 Ga.App. 845, 848, 395 S.E.2d 64 (1990), overruled on other grounds, Pace Constr. Corp. v. Northpark Assn, 215 Ga.App. 438, 439, 450 S.E.2d 828 (1994). "In French v. Merrill Lynch, etc., 784 F.2d 902(3) & (4) (9th Cir.[1986]), the court concluded that an arbitrator's decision must be upheld unless it is completely irrational or it constitutes a manifest disregard of the law." Bartlett, supra at 848, 395 S.E.2d 64. Further, it is well established that in reviewing an arbitration award, deference given to an arbitrator's decision accompanies not only a review of the final order itself, but also is given to the arbitrator's decision to control the order, procedure, and presentation of evidence. First Preservation Capital v. Smith Barney, Harris Upham & Co., 939 F.Supp. 1559 (S.D.Fla.1996). It is the law in Georgia that a trial court's ruling confirming an arbitration award should not be disturbed unless it is clearly erroneous and not supported by any evidence in the record. Cotton States Mut. Ins. Co. v. Nunnally Lumber Co., 176 Ga. App. 232, 335 S.E.2d 708 (1985); see First Options of Chicago v. Kaplan, 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) (holding that the standard of review of district court decisions requires accepting findings of fact not clearly erroneous, but deciding questions of law de novo). In this case, the trial court reviewed the Hilliards' claims of partiality and determined that the claims were unfounded and did not preclude confirmation of the award. After reviewing the record, the trial court's ruling must be affirmed, since it was not clearly erroneous and is supported by ample evidence. 3. The Hilliards also contend that the trial court erred by failing to vacate the arbitration award due to the failure of the arbitrators to grant a continuance upon sufficient cause shown. We disagree. It is well established in Georgia that "[t]he grant or denial of a request for continuance lies within the discretion of the trial court, see OCGA § 9-10-167(a), and will not be disturbed on appeal absent an abuse of discretion." Purvis v. Ballantine, 226 Ga.App. 246, 247(1)(a), 487 S.E.2d 14 (1997); Americani v. Sidky, 199 Ga.App. 823, 406 S.E.2d 259 (1991). While there is no Georgia authority directly addressing the continuance of an arbitration hearing such as this one, OCGA § 9-9-70 governs the postponement of arbitration proceedings in medical malpractice actions in Georgia and states that an arbitration panel may postpone the hearing of a case when one party is not ready. Arbitrators in medical malpractice cases are not required to postpone an arbitration proceeding under any circumstances, but rather the decision is left to the arbitrator's discretion as long as such decision is "consistent with the ends of justice, considering all the circumstances of the case." OCGA § 9-9-70. Federal courts uniformly have held that whether to continue a hearing is in the discretion of the arbitrators and have concluded that the issue "comes down to the question whether there was any reasonable basis for the arbitrators to refuse to postpone the hearing." (Citations and punctuation omitted.) Marshall & Co. v. Duke, 941 F.Supp. 1207, 1211 (N.D.Ga.1995), aff'd, 114 F.3d 188 (11th Cir.1997); DVC-JPW Investors v. Gershman, 5 F.3d 1172 (8th Cir.1993); Schmidt v. Finberg, 942 F.2d 1571 (11th Cir.1991). Furthermore, in this case, the parties signed a Uniform Submission Agreement stating that the arbitration hearing would be governed pursuant to the NASD's Code of Arbitration Procedure. Section 30 of the NASD Code of Arbitration Procedure states 44 that the arbitrators may, in their discretion, adjourn any hearing. The record shows that the Hilliards requested a continuance of the December 14, 1995 arbitration hearing date because they were not ready to proceed with the presentation of the case. After the close of Bradford's case, the arbitration hearing was rescheduled for April 15, 1996, some four months later. The Hilliards contend that on the evening of April 14, 1996, William Hilliard suffered an acute attack of polycythemia and was treated at the Chandler Hospital Emergency Room from 9:40 p.m. until 1:00 a.m. the morning of the hearing. Mr. Hilliard alleges that he received both Demerol and Phenergan intravenously and was told to see his doctor the following day. However, on the morning of April 15, 1996, Mr. Hilliard was able to drive to Atlanta, while Mrs. Hilliard sat in the back seat of the car, and continued to prepare for the hearing. As they drove toward Atlanta, Mr. Hilliard stopped at various intervals and contacted both the Atlanta and New York offices of the NASD, attempting to obtain a continuance due to his illness. Mr. Hilliard's request for a continuance was ultimately denied. He was, however, given a deferral of the hearing until 1:00 p.m. on that day. Upon arrival, Mr. Hilliard stated his medical condition on the record. He presented no affidavit from a doctor that he was unable, because of his illness, to go forward with the arbitration hearing and did not request a continuance of the hearing once he arrived. Mrs. Hilliard was present during the entire hearing. Furthermore, polycythemia is a chronic condition that is aggravated by stress; there was no showing by the Hilliards that Mr. Hilliard's condition would improve at a future time.[1] Additionally, the record fails to reveal that Mr. Hilliard had difficulty proceeding due to his chronic condition. Under the facts of this case, there was a reasonable basis for the arbitrators' refusal to postpone the hearing a second time, and therefore, there was no abuse of discretion. 4. The Hilliards contend that the trial court erred by failing to vacate the arbitration award because the arbitrators' award of attorney fees exceeded their authority. We disagree. "In light of the federal policy favoring arbitration at work here, the Court's task is to resolve all doubt in favor of the arbitrator's authority to award a particular remedy. This approach is fully consistent with the presumption of correctness afforded arbitration awards and the summary nature of court confirmation of such awards. In fact, the [9 USCA] § 10(a)(4) prohibition against arbitrators' exceeding their powers is to be accorded the narrowest of readings." (Citations and punctuation omitted.) Marshall & Co. v. Duke, supra at 1213; Blue Tee Corp. v. Koehring Co., 999 F.2d 633, 636 (2nd Cir. 1993); Willoughby Roofing, etc., Co. v. Kajima Intl., 776 F.2d 269, 270 (11th Cir.1985). Prior to the arbitration, the parties had agreed to submit all controversies between them to binding arbitration. The parties submitted their case to the NASD for arbitration and consented to be governed by the rules and by-laws of the NASD. Section 43(c) of the NASD Code of Arbitration procedure states "In addition to forum fees, the arbitrator(s) may determine in the award the amount of costs incurred pursuant to Sections 30, 32, 33, and 37 and, unless applicable law directs otherwise, other costs and expenses of the parties and arbitrator(s) which are within the scope of the agreement of the parties." The award of attorney fees has been upheld under § 43(c) by the courts. Mastrobuono v. Shearson Lehman Hutton, 514 U.S. 52, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995) (holding award of punitive damages on ground that § 43(c) of NASD rules authorized such an award); Marshall & Co. v. Duke, supra (finding that arbitrators under authority of the NASD rules could award attorney fees in exceptional cases). *45 Further, both the plaintiffs and the defendant affirmatively sought an award of attorney fees from the panel in their pleadings and before the panel at the arbitration hearing. "The parties['] mutual agreement to have any and all fee issues decided by the panel is evidenced by their joint submission of the issues to the panel. Having agreed to have the fees issue decided by the panel, the parties will not now be heard to object that the panel lacked the power to decide the issues submitted." (Footnote and emphasis omitted.) Marshall & Co. v. Duke, supra at 1215. Accordingly, for all of the foregoing reasons, the trial court did not err in finding that the award of attorney fees did not exceed the arbitration panel's authority. 5. In their final enumeration of error, the Hilliards contend that the trial court erred by failing to vacate the arbitration award for other misbehavior on the part of the arbitrators which prejudiced their rights. Specifically, the Hilliards contend that the trial court erred by failing to dismiss the arbitration award on the ground that all copies of the tapes of the hearing provided by the NASD, including the certified copy sent directly to the court and filed of record, had numerous inaudible sections and portions of the second hearing were missing. In this case, the Hilliards failed to present any credible admissible evidence at the confirmation hearing showing that such tapes were incomplete. Further, the Hilliards have not made any showing of how their rights were prejudiced as a result of the allegedly incomplete tapes. Moreover, after a review of the certified copies of the tapes, the trial court confirmed the award. Therefore, the Hilliards' assertions based on this ground must be rejected. Judgment affirmed. BIRDSONG, P.J., and RUFFIN, J., concur. NOTES [1] Polycythemia is defined as follows: (1) "an increase above the normal in the number of red cells in the blood"; (2) "a secondary p. resulting from anoxia, e.g., in congenital heart disease, pulmonary emphysema, or prolonged residence at high altitude"; (3) "associated with hypertension but without splenomegaly." Stedman's Medical Dictionary (22nd ed.), p. 999.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1710571/	677 So.2d 755 (1995) Donald J. MARNON v. CITY OF DOTHAN, et al. 2940786. Court of Civil Appeals of Alabama. October 13, 1995. Rehearing Denied December 15, 1995. Certiorari Denied April 12, 1996. 756 Edward M. Price, Jr. of Farmer, Price, Hornsby & Weatherford, Dothan, for Appellant. F. Lenton White, City Atty., Dothan, for Appellees. Alabama Supreme Court 1950487. ROBERTSON, Presiding Judge. On September 30, 1994, Donald J. Marnon filed a complaint, in the Houston County Circuit Court, against the City of Dothan (the City); and against Don Clements; Chester Sowell; John Glanton; and George Williams, all individually and as commissioners of the City of Dothan (collectively referred to herein as the Commissioners). Marnon's complaint stated six separate counts. The first count of Marnon's complaint alleged that the City had breached an April 7, 1987, employment contract between Marnon and the City, whereby Marnon had been employed as "city manager," by failing to pay him for compensatory time under the terms of that contract. The second count alleged that the City had breached a May 2, 1989, employment contract between Marnon and the City, whereby Marnon had been employed as "city manager," by failing to pay him for compensatory time under the terms of that contract. The third count alleged that the City had breached a May 4, 1993, employment contract between Marnon and the City, whereby Marnon had been employed as "city manager," by failing to pay him for compensatory time under the terms of that contract. The fourth count of Marnon's complaint alleged that the City had wrongfully terminated the May 4, 1993, employment contract on July 12, 1994; the fifth count alleged that the City had negligently terminated the May 4, 1993, employment contract on July 12, 1994; and the sixth count alleged that the Commissioners had intentionally interfered with Marnon's business and contractual relationship with the City, and that because of their interference 757 Marnon had been terminated from his employment on July 12, 1994, and had been caused to lose benefits under the terms of his employment contract with the City. Marnon sought damages of $50,111.50, and costs, on count one of his complaint; $54,180, and costs, on count two; $9,975.50, and costs, on count three; $36,250 on count four; $250,000 on count five; and compensatory damages of $100,000 and punitive damages of $250,000 on count six. On October 31, 1994, the City and the Commissioners filed a motion to dismiss. The grounds for the dismissal were: (1) that the complaint failed to state a claim upon which relief could be granted; (2) that the first and second counts of the complaint were barred by the statute of limitations; (3) that the claims alleged in the complaint were preempted by 29 U.S.C. §§ 207(o) and 213; (4) that count four of the complaint failed to state a claim upon which relief could be granted because Marnon had been an at-will employee; and (5) that the sixth count of the complaint was barred because, they said, the Commissioners were entitled to absolute immunity. On December 1, 1994, Marnon filed a response to the motion to dismiss. That same day, the City and the Commissioners filed a brief in support of their motion to dismiss. Also on that same day, the trial court entered an order, finding that the Commissioners were immune from suit in their individual capacities, under the "doctrine of municipal legislative immunity." The trial court dismissed count six "against the individual Commissioners." On December 16, 1994, the City and the Commissioners filed an answer, asserting the affirmative defenses of payment; Marnon's employee-at-will status; laches; waiver; good faith immunity; qualified immunity; absolute immunity; and the statute of limitations. They also asserted as affirmative defenses that punitive damages cannot be assessed against the City or its officials and that a city cannot be held liable for the intentional acts of its servants or employees. On February 2, 1995, the City and the Commissioners filed a motion for summary judgment, with supporting affidavits and exhibits. On February 6, 1995, Marnon filed a response to the motion for summary judgment, requesting that the hearing on the motion be continued until Marnon had time to complete discovery. On April 6, 1995, the City and the Commissioners filed additional affidavits and exhibits in support of their motion for summary judgment. On April 10, 1995, Marnon filed a brief in opposition to the motion for summary judgment, with supporting affidavits and exhibits. Marnon also filed a motion to strike or to disallow the additional affidavits and exhibits filed by the City and the Commissioners, and any briefs that the City and the Commissioners might file in support of their summary judgment motion. Marnon alleged that both the City and the Commissioners had failed to comply with Rule 56(c)(2), Ala. R.Civ.P., because, he said, they had filed the additional material in support of their motion for summary judgment less than 10 days before the date set for the hearing on the motion for summary judgment, April 13, 1995. On April 11, 1995, the City and the Commissioners filed a brief in support of their motion for summary judgment. On April 13, 1995, the City and the Commissioners filed an opposition to Marnon's motion to strike or to disallow their additional affidavits and exhibits and their brief in support of their summary judgment motion. On April 20, 1995, the trial court entered a judgment, stating, in pertinent part: "In that the [additional affidavits and exhibits] and [the] final brief of [the City and the Commissioners] [were] not served at least 10 days prior to the hearing, upon objection and motion of [Marnon] such materials are stricken and not considered. "Upon consideration of the pleadings, other affidavits, depositions, and materials submitted by both sides, the Court finds that this case is governed by the terminology of the [three] contracts, particularly the existing contract dated May 4, 1993, as well as the provisions of the City Code and the Regulations and Rules of the City of Dothan relating to personnel and the laws 758 applying to City Managers and the City Manager form of government. "In the latest contract between the parties and those preceding, Section 2, paragraph B provides that `Nothing in this agreement shall prevent, limit or otherwise interfere with the right of the City Commission to terminate the services of the Manager at any time, subject only to the provision set forth in Section 3, paragraph A, of this Agreement.' Section 3, paragraph A, requires payment of four months base salary as has been done in this case. Such provision is to be construed as a contract for employment at-will with [the] condition of the payment of the four months' base salary. Under such a contract, either party may terminate it for any reason. "In regard to compensatory time, Section 5 of said contract allows [Marnon] `to take compensatory time off [as] he shall deem appropriate during normal office hours.' There is nothing in the contract requiring approval by anyone else. Therefore, [Marnon] has been allowed to take the compensatory time as he sees fit with no provision in the contract for monetary compensation for overtime hours nor for [the] accumulation of overtime hours to be later compensated in any manner. The contract does not so provide and the Court is not aware of any law or authority requiring such. "The Court finds that there is no ambiguity or room for interpretation of the employment contract, the subject of this case, with specific provisions therein governing the claims of [Marnon]. The Court finds that failure to provide written evaluation reports does not affect the upholding of the clear material provisions of the contract. Therefore, [the City and the Commissioners'] Motion for Summary Judgment is granted...." Marnon appeals, raising two issues: (1) whether the trial court erred in entering the summary judgment in favor of the City and the Commissioners, and (2) whether the trial court erred by dismissing count six of the complaint against the Commissioners individually. This case is before this court pursuant to § 12-2-7, Ala.Code 1975. We first address whether the trial court erred in entering the summary judgment in favor of the City and the Commissioners. An appellate court reviewing a summary judgment employs the same standard utilized by the trial court. Southern Guar. Ins. Co. v. First Alabama Bank, 540 So.2d 732 (Ala.1989). A summary judgment is proper when "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." Rule 56(c)(3), Ala.R.Civ.P. Further, the moving party bears the burden of proof. Jones v. Newton, 454 So.2d 1345 (Ala.1984). Like the trial court, the appellate court views the evidence and resolves all reasonable doubts in favor of the nonmovant. Specialty Container Mfg., Inc. v. Rusken Packaging, Inc., 572 So.2d 403 (Ala.1990). The burden is on the movant to show that there exists no genuine issue of material fact; however, once a party moving for a summary judgment makes a prima facie showing that no genuine issue of material fact exists, then the burden shifts to the nonmovant to rebut the prima facie showing. McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So.2d 957 (Ala.1992). The opposing party must show by substantial evidence that there is a genuine issue of material fact that would require a resolution by a factfinder. Johnson v. Citizens Bank, 582 So.2d 576 (Ala.Civ. App.1991). Substantial evidence is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). Marnon argues that the trial court erred in entering the summary judgment on his breach of contract claims, because, he says, pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 through 219 (1986 and Supp. 1994), he is entitled to be paid overtime compensation for the compensatory 759 time that he accumulated, and because, he says, Section 5, paragraph A, of his employment contract provided that he be allowed to "take compensatory time off ... during normal office hours." The FLSA requires employers to pay their employees for overtime at a rate of one and one-half times their regular wage. 29 U.S.C. § 207(a)(1); see also Moreau v. Klevenhagen, 508 U.S. 22, 113 S.Ct. 1905, 123 L.Ed.2d 584 (1993); White v. City of Dothan, 643 So.2d 1005 (Ala.Civ.App.1994). In 1985, the United States Supreme Court held that the overtime provisions of the FLSA apply to employees of state and local governments. Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985). Following that decision, the United States Department of Labor announced that it would hold state and local government employers to the standards of the FLSA, effective April 15, 1985. S.Rep. No. 99-159, p. 7 (1985), U.S.Code Cong. & Admin.News 754, 758. In response to the Garcia decision and to the Department of Labor's announcement, Congress amended the FLSA to afford state and local government employers some relief from the burden of paying cash overtime compensation to their covered employees. S.Rep. No. 99-150, 99th Cong., 1st Sess. 10, U.S.Code Cong. & Admin.News 651, 671, 99 Stat. 787, as codified in 29 U.S.C. § 207(o)(1). Subsection 7(o)(2)(A)(i) and (ii) of the FLSA provide that state and local government employers may provide compensatory time off in lieu of cash for overtime hours, pursuant to provisions of a collective bargaining agreement between the state and local government employer and the representatives of the employees; or in the case of employees not covered by a collective bargaining agreement, an agreement or understanding arrived at between the employer and the employee before the employee actually begins work for the employer. 29 U.S.C. § 207(o)(2)(A)(i) and (ii). Although the City acknowledges that the provisions of the FLSA apply to its employees, the City asserts that Marnon's position as "city manager" exempted him from the overtime and compensatory time requirements of the FLSA, because, it says, relying on 29 U.S.C. § 213(a)(1), Marnon was employed in an "administrative capacity." Section 213(a)(1) of the FLSA specifically provides that the FLSA requirements set forth in § 207 shall not apply to "an employee employed in a bona fide executive, administrative, or professional capacity." Section 11-44E-91, Ala.Code 1975, authorizes the appointment of a city manager by a majority vote of a city's commissioners, and § 11-44E-92 classifies the city manager as "the administrative head of the city." Therefore, we must conclude that Marnon, as "city manager," was employed in an administrative capacity and was exempt from the overtime and compensatory time off requirements of the FLSA. 29 U.S.C. § 213(a)(1). Marnon also argues that, considering the affidavit of the former mayor of the City, it is clear the parties intended that upon the termination of his contract, Marnon would be paid for any compensatory time that he had not used. "The parol evidence rule provides that, absent some evidence of fraud, mistake, or illegality, a party to an unambiguous written contract cannot offer parol, or extrinsic, evidence of prior or contemporaneous oral agreements to change, alter, or contradict the terms of the contract." Environmental Systems v. Rexham Corp., 624 So.2d 1379, 1381 (Ala.1993). Section 5, paragraph A, of Marnon's 1993 employment contract authorized Marnon "to take compensatory time off [as] he shall deem appropriate during normal office hours." Accordingly, we conclude that Section 5, paragraph A, of the 1993 employment contract is clear and unambiguous, and that Section 5, paragraph A, does not provide for the cash payment of Marnon's accumulated compensatory time upon the termination of his contract. Furthermore, after carefully reviewing the record, we find that Marnon did not present any evidence of fraud, mistake, or illegality regarding the terms of his employment contract, and, therefore, we conclude that the affidavit of the former mayor of the City cannot be considered in determining whether Marnon was entitled to be paid 760 for his accumulated compensatory time. Consequently, we conclude that Marnon's employment contract did not entitle Marnon to a cash payment for any unused accumulated compensatory time. Marnon further argues that the trial court erred in entering the summary judgment on his claim that the City had wrongfully terminated his 1993 employment contract, because, as he says, he had "stood up" to the Commissioners and had refused to condone illegal or unethical conduct. Section 2, paragraph B, of Marnon's 1993 employment contract provides: "Nothing in this agreement shall prevent, limit or otherwise interfere with the right of the City Commission to terminate the services of [Marnon] at any time, subject only to the provisions set forth in Section 3, paragraph A, of this Agreement." Section 3, paragraph A, provides: "In the event that the City exercises its right to terminate Marnon before the expiration of the ... term of employment and during such time [Marnon] is willing and able to perform the duties of City Manager, then in that event, the City agrees to pay [Marnon] a lump sum cash payment equal to his base salary for four months, provided, however, that in the event [Marnon] is terminated because of his conviction in the trial court of any felony then, in that event, the City has no obligation to give notice or pay the aggregate severance sum designated in this paragraph. In the event [that Marnon] voluntarily resigns his position with the City before the expiration of the aforesaid term of employment, then he shall give the City thirty days notice in advance." Construing Section 2, paragraph B, and Section 3, paragraph A, of the 1993 employment contract together, we find it clear that Marnon's employment contract with the City was terminable at any time by either party, with certain conditions. Therefore, we conclude that Marnon was an at-will employee and that the City could terminate Marnon's employment at any time, for any reason, including an improper reason. Kidder v. AmSouth Bank, N.A., 639 So.2d 1361 (Ala.1994); Salter v. Alfa Ins. Co., 561 So.2d 1050 (Ala.1990). Additionally, Marnon contends that the trial court erred by entering the summary judgment on his claim that the City had negligently terminated his employment contract. However, Marnon fails to cite any authority to support this contention. Rule 28(a)(5), Ala.R.App.P., provides that "[t]he argument shall contain the contentions of the appellant with respect to the issues presented, and the reasons therefor, with citations to the authorities, statutes and parts of the record relied on." See also McLemore v. Fleming, 604 So.2d 353 (Ala.1992). Marnon's failure to cite supporting authority for his contention leaves this court with no alternative but to affirm as to this claim. Rule 28(a)(5), Ala.R.App.P.; Pierce v. Helka, 634 So.2d 1031 (Ala.Civ.App.1994). Based on the foregoing, we conclude there were no genuine issues of material fact for a factfinder to consider and that the City and the Commissioners were entitled to a judgment as a matter of law. We next address whether the trial court erred by dismissing count six of Marnon's complaint against the Commissioners individually. Count six alleged that the individual Commissioners had intentionally interfered with Marnon's business and contractual relationship with the City. Marnon asserts that although the trial court held that the individual Commissioners were entitled to legislative immunity, the Commissioners were not entitled to such immunity, because, he says, the Commissioners had threatened to terminate his contract "because he was doing what he was supposed to under the law." The Commissioners assert that they were entitled to legislative immunity, because, they say, they voted to terminate Marnon's contract and their doing so was a legislative act, pursuant to § 11-44E-44(10), Ala. Code 1975. Section 11-44E-44(10) provides, in pertinent part: "The [city] commission shall be the legislative body of the city. It shall have powers vested in it by this chapter. These powers shall be as follows: ". . . . 761 "(10) To employ the city manager; to discharge the city manager; to enter into [an] employment contract with the city manager." Our supreme court has held that members of a city council and the mayor of the city, in their respective individual capacities, are entitled to absolute and unqualified immunity from personal liability in the performance of their duties in the consideration and adoption of a resolution. Tutwiler Drug Co. v. City of Birmingham, 418 So.2d 102 (Ala.1982). However, the record is devoid of any admissible evidence indicating that the Commissioners adopted a resolution terminating Marnon's employment contract. Therefore, we cannot hold that the Commissioners are entitled to absolute immunity based on their performance of a legislative function. However, the Commissioners also assert that they were entitled to qualified immunity because, they argue, the decision not to retain an employee is discretionary. "City officials acting within the general scope of their authority have a qualified or discretionary immunity and are not subject to tort liability for an administrative act or omission. Taylor v. Shoemaker, 605 So.2d 828 (Ala.1992), adopting Restatement (Second) of Torts § 895D (1979). The Restatement provides that `A public officer acting within the general scope of his authority is not subject to tort liability for an administrative act or omission if ... he is immune because engaged in the exercise of a discretionary function.' Thus, as a general rule, city officials are immune from suit unless they violate clearly established law." Ex parte City of Birmingham, 624 So.2d 1018, 1021 (Ala.1993). After a review of the record and the applicable law, we conclude that the Commissioners were statutorily vested with discretion in the hiring of Marnon and the termination of Marnon's employment contract. § 11-44E-44(10). Therefore, the Commissioners were entitled to qualified or discretionary immunity, and the trial court properly dismissed count six of Marnon's complaint against the Commissioners. The judgment of the trial court is due to be affirmed. AFFIRMED. THIGPEN, YATES, MONROE, and CRAWLEY, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2067262/	597 N.E.2d 240 (1992) 232 Ill. App. 3d 342 173 Ill. Dec. 532 In re MARRIAGE OF Gordon L. CLARK, Petitioner-Appellant, and Barbara P. Clark, Respondent-Appellee. No. 2-91-0485. Appellate Court of Illinois, Second District. July 24, 1992. 241 Marsha H. Cellucci, Cellucci, Yacobellis & Holman, Naperville, for Gordon L. Clark. Allen S. Gabe, Gabe, Gabe & Associates, Theresa M. Varnet, Spain, Spain & Varnet, Chicago, for Barbara P. Clark. Justice UNVERZAGT delivered the opinion of the court: The petitioner, Gordon L. Clark, appeals from the judgment of the circuit court of Du Page County granting the motion of the respondent, Barbara P. Clark, to dismiss the cause on the ground of forum non conveniens and to transfer it to the county of Berkshire in the State of Massachusetts. Gordon also appeals from a prior order of the court granting Barbara's amended motion to vacate the judgment of dissolution. We affirm as to the dismissal and transfer of the cause and do not address the propriety of the court's order vacating the judgment of dissolution because we lack jurisdiction to do so. Gordon filed his petition for dissolution of marriage on June 16, 1988, and Barbara subsequently filed a cross-petition for child custody. During the course of discovery and settlement negotiations, it was apparent that Barbara was acting strangely and was not cooperating with her counsel. She never attended a court hearing or participated in a joint conference. On one occasion, the trial of the cause had to be continued due to Barbara's refusal to participate or cooperate with her counsel. The trial judge suggested that a guardian should be appointed for Barbara but, for reasons the court found not to be attributable to either counsel, this was not done. The cause came on for trial on October 20, 1989. Barbara refused to participate and was not present at the trial. Gordon was present at trial, although he had moved to Massachusetts earlier that year. Following trial, the court entered its judgment of dissolution of marriage on November 15. On the same date, Barbara's counsel were granted leave to withdraw due to Barbara's refusal to cooperate. The dissolution judgment provided for an equitable division of the marital property of the parties, child custody and child support and reserved the issue of maintenance. 242 Subsequently, on November 22, Gordon petitioned for the appointment of a guardian of Barbara's estate only when she refused to sign the closing documents on the sale of the marital residence. The guardian ad litem appointed for Barbara in connection with Gordon's petition interviewed her on December 6. On that day also, due to unrelated events which occurred several days earlier, Barbara was involuntarily committed to the Elgin Mental Health Center. She was determined two days later to be a person not subject to involuntary admission. Barbara denied during the interview with the guardian ad litem that she was either divorced from her husband or involved in any court proceeding, stated that she did not want to communicate with anyone regarding her condition and said she wanted only to get back in her car with her daughter. The guardian ad litem recommended the appointment of a plenary guardian for Barbara's person and estate. On December 8, coguardians of both Barbara's person and estate were appointed. Barbara moved to Massachusetts on or about December 9, and, by agreement of the parties, the children moved in with their father in Massachusetts. On December 13, Barbara filed a motion to vacate or modify the November 15 judgment of dissolution on the ground she was mentally ill throughout the proceedings and was incapable of comprehending the meaning of the proceedings or the settlement agreement which had been entered into on her behalf. On January 23, 1990, shortly after her move to Massachusetts, Barbara was committed to Berkshire Medical Center in Massachusetts after she was diagnosed as suffering from chronic schizophrenia. The "date of onset" of the chronic schizophrenia was shown on the medical report as "approximately 1979." Barbara filed an amended motion to vacate the judgment of dissolution in July 1990. Gordon replied, and, after hearing on November 1, the court vacated the judgment of dissolution and ordered a new trial. The court allowed Barbara 14 days to file her amended answer or otherwise plead and set the cause for trial in January 1991. On December 3, 1990, Gordon petitioned this court pursuant to Supreme Court Rule 306 (134 Ill.2d R. 306) for leave to appeal the court's grant of a new trial. This court first mistakenly struck the petition for leave to appeal as untimely, then granted Gordon's motion to reconsider and, upon doing so, denied the petition for leave to appeal on February 5, 1991. While Gordon's petition for leave to appeal was pending, and within the time allotted her for filing an amended answer to the petition for dissolution, Barbara filed a motion to dismiss based on forum non conveniens or, in the alternative, requested a transfer of the cause to Massachusetts. It was alleged therein that, since the filing of the petition for dissolution, both of the parties and their children had moved to Massachusetts and, under Massachusetts law, Massachusetts properly had jurisdiction of the parties and the cause of action. It was further alleged the parties owned no real property in the State of Illinois and had no contacts with the State of Illinois other than the instant dissolution cause and funds from the sale of the marital residence which were held in escrow by Barbara's Illinois coguardian. Because the court did not receive Gordon's response to Barbara's forum non conveniens motion, the court granted Barbara's motion to dismiss but later vacated its dismissal on Gordon's motion. Gordon responded to the motion admitting, in pertinent part, Massachusetts' probable jurisdiction of the cause of action and the parties if the cause were to be filed there. After a hearing on March 26, 1991, the court granted Barbara's motion for transfer of the cause on the ground of forum non conveniens and ordered that the cause and the escrowed funds be transferred to Massachusetts. It also declared moot a pending motion to approve the distribution of the escrowed funds. Gordon timely filed a notice of appeal from the court's March 26 order, but we denied as untimely his subsequent motion, filed five months later, seeking to amend his notice of appeal to include the court's November 1, 1990, order vacating the judgment of dissolution. 243 In this appeal, Gordon seeks review and reversal of the trial court's order (1) vacating the judgment of dissolution and (2) dismissing the cause under the doctrine of forum non conveniens and transferring it to Massachusetts. We find we lack jurisdiction to address the merits of the issue of the trial court's vacatur of the judgment of dissolution for two reasons. First, Gordon's notice of appeal does not specify his appeal was taken from that judgment but, rather, only from the court's order transferring the cause to Massachusetts. As noted above, we rejected as untimely his motion to amend his notice of appeal to include that order vacating the judgment of dissolution, and we plainly did not err in that rejection. Gordon's five-month delay in seeking the amendment far exceeded the 30-day time limits provided in Supreme Court Rule 303. 134 Ill.2d Rules 303(c)(4), (e). Second, our denial of Gordon's earlier petition for leave to appeal the trial court's order for a new trial pursuant to the provisions of Supreme Court Rule 306 is not subject to relitigation before this court. (See Robbins v. Professional Construction Co. (1978), 72 Ill. 2d 215, 221-23, 20 Ill. Dec. 577, 380 N.E.2d 786.) Rule 306 provides the exclusive means of reviewing the grant of a new trial. (Ill.Ann.Stat, ch. 110A, par. 306, Historical & Practice Notes, at 245 (Smith-Hurd 1985).) We have already denied Gordon's petition for leave to appeal under that rule, and, consequently, we proceed to address only Gordon's contention that the court abused its discretion in dismissing the cause under the doctrine of forum non conveniens. Initially, Gordon suggests that there may have been "some confusion" as to what the trial judge believed the motion to be since its final order transferred the cause to Massachusetts rather than dismissing it. Barbara's motion sought relief in the alternative, requesting dismissal or transfer to Massachusetts. Gordon states that, absent an agreement of the parties, there does not appear to be any provision in the supreme court rules for inter state, as opposed to intra state, transfers. Indicta in In re Marriage of Kelso (1988), 173 Ill.App.3d 746, 123 Ill. Dec. 352, 527 N.E.2d 990, a motion to transfer out of State on the grounds of forum non conveniens was described parenthetically as "more properly, a motion to dismiss." (Kelso, 173 Ill.App.3d at 751, 123 Ill. Dec. 352, 527 N.E.2d 990.) Barbara concurs in Gordon's position that the effect of the court's order was to dismiss the cause, and we will construe it thusly for purposes of our discussion below. Gordon argues it was an abuse of the court's discretion to dismiss the cause merely because the parties had moved, particularly where Barbara's forum non conveniens motion was filed more than two years after she initially filed her answer to the petition for dissolution. We find inapposite the cases cited by Gordon in support of his argument that the mere fact the parties moved was insufficient reason to grant dismissal and transfer the cause to Massachusetts. Neither Kovac v. Kovac (1960), 26 Ill.App.2d 29, 167 N.E.2d 281, nor Kelly v. Warner (1983), 119 Ill.App.3d 217, 77 Ill. Dec. 273, 460 N.E.2d 329, directly concerns the issue of whether the court properly exercised its discretion in deciding a forum non conveniens motion but, rather, whether the court in those respective cases was divested of jurisdiction due to events occurring subsequent to its jurisdiction attaching, such as a change of residence. It is clear that once jurisdiction attaches in a cause, it continues until all issues of fact and law have been finally determined. (Kovac, 26 Ill.App.2d at 47-48, 167 N.E.2d 281; Kelly, 119 Ill.App.3d at 219, 77 Ill. Dec. 273, 460 N.E.2d 329.) Under the doctrine of forum non conveniens, however, a court has discretion to decline to continue its jurisdiction over a cause "whenever it appears that there is another forum that can better `serve the convenience of the parties and the ends of justice.'" Adkins v. Chicago, Rock Island & Pacific R.R. Co. (1973), 54 Ill. 2d 511, 514, 301 N.E.2d 729, quoting Lonergan v. Crucible Steel Co. of America (1967), 37 Ill. 2d 599, 606, 229 N.E.2d 536. 244 Whether to grant or deny a forum non conveniens motion is within the broad discretion of the trial court, which balances the private interest factors affecting the litigants and the public interest factors affecting the administration of courts, and, on review, this court will reverse only where the trial court has abused its discretion in weighing the relevant considerations. (Griffith v. Mitsubishi Aircraft International, Inc. (1990), 136 Ill. 2d 101, 106, 143 Ill. Dec. 274, 554 N.E.2d 209; McClain v. Illinois Central Gulf R.R. Co. (1988), 121 Ill. 2d 278, 288, 117 Ill. Dec. 207, 520 N.E.2d 368; Schoon v. Hill (1990), 207 Ill.App.3d 601, 605, 152 Ill. Dec. 841, 566 N.E.2d 718.) The doctrine of forum non conveniens assumes there is more than one forum with jurisdiction over the parties and subject matter (Bland v. Norfolk & Western Ry. Co. (1987), 116 Ill. 2d 217, 107 Ill. Dec. 236, 506 N.E.2d 1291) and is founded in considerations of fundamental fairness and sensible and effective judicial administration. (Adkins, 54 Ill.2d at 514, 301 N.E.2d 729.) Although deference is generally accorded to the plaintiff's choice of forum, less deference to that choice is warranted if the plaintiff is foreign to the forum. (McClain, 121 Ill.2d at 289-90, 117 Ill. Dec. 207, 520 N.E.2d 368.) The test in deciding the motion is whether the relevant factors, viewed in their totality, strongly favor transfer to the forum suggested by the defendant. Griffith, 136 Ill.2d at 108, 143 Ill. Dec. 274, 554 N.E.2d 209. Relevant private and public interest factors to be considered were noted in Griffith: "Private interest factors to be considered are the convenience of the parties, the relative case of access to sources of proof, the accessibility of witnesses, and `all other practical problems that make trial of a case easy, expeditious and inexpensive.' [Citations.] Relevant public interest factors include the administrative difficulties caused when litigation is handled in congested venues, the unfairness of imposing jury duty upon residents of a county with no connection to the litigation, and an interest in having localized controversies decided locally." Griffith, 136 Ill.2d at 105-06, 143 Ill. Dec. 274, 554 N.E.2d 209. Here, the trial court was apprised of the facts that the dissolution was filed by Gordon while he and his family were residents of Naperville, Illinois; that the judgment of dissolution was vacated on the basis Barbara was not competent during the dissolution proceedings; that by the time a new trial was ordered and the motion to dismiss was heard, Gordon, Barbara and their children had been residents of Massachusetts for some time; that Barbara was often hospitalized in Massachusetts; that Barbara had coguardians: her sister in Massachusetts was one and an attorney in Illinois was the other; that her coguardian in Massachusetts had an attorney; that the parties' only property remaining in Illinois was funds held in an escrow account; that the new trial would bring Gordon and Barbara back to Illinois to try the issues; and that the children lived with Gordon in Massachusetts. In view of these circumstances, we cannot conclude the trial court abused its discretion in declining further jurisdiction of the cause. It is apparent that the Massachusetts forum can better serve the convenience of the parties and the ends of justice. The parties all now reside in Massachusetts, Gordon having lived there since early 1989 and Barbara and the children since late 1989. Barbara's sister, who is also her coguardian, and Barbara's coguardian's attorney are also in Massachusetts. The children live with Gordon in Massachusetts, and Barbara is often hospitalized there. For Gordon and Barbara to have to return to Illinois for a new trial would inconvenience both of them, necessitate alternate care arrangements for the children and put an undesirable distance between Barbara, her coguardian sister and attorney, and familiar medical facilities in Massachusetts. The couple no longer owns any property in Illinois except funds in the escrow account and even those, it appears, have already been transferred to Massachusetts. Any financial or other records needed for trial would most likely already 245 be in the parties' possession in Massachusetts. As for the public interests involved, we have no knowledge of the congestion of Massachusetts' venues; presumably they bear caseloads similar to those in Illinois. No jury would be required for trial of the cause, and, since the parties and their children are all residents of Massachusetts, that State bears a substantial interest in the outcome of this dissolution proceeding. Gordon complains that he has already incurred substantial expenditures of time and money and that he will be required to start over if the court's dismissal is upheld. A new trial has already been ordered to be held, however, no matter whether the cause is dismissed from the Illinois forum or not. Moreover, it appears from the record that the parties will be able to, if they so desire, draw upon the past record of the cause in preparing for the new trial. In our opinion, these relevant factors noted above, viewed in their totality, strongly favor transfer to the forum suggested by Barbara. Consequently, there was no abuse of discretion, and no reversal is warranted. Gordon's further argument on appeal as to this issue concerns the timeliness of Barbara's motion to dismiss. He argues that the language of Supreme Court Rule 187 (134 Ill.2d R. 187(a)) should not be interpreted to mean that a party may file a forum non conveniens motion to dismiss "within 90 days after the last day allowed for the filing of that party's amended answer." In the instant cause, after the court granted Barbara's motion to vacate the judgment of dissolution, Barbara requested and the court granted her time to file an amended answer. Instead of filing an amended answer within that time, Barbara filed her motion to dismiss on the grounds of forum non conveniens. Supreme Court Rule 187 was promulgated in response to the case of Bell v. Louisville & Nashville R.R. Co. (1985), 106 Ill. 2d 135, 88 Ill. Dec. 69, 478 N.E.2d 384, in which the court considered, for the first time, the effect of delay on the propriety of granting a motion to transfer or to dismiss on the basis of forum non conveniens. The court concluded in that consolidated case that the defendants, whose forum non conveniens motions for dismissal were delayed for 39 and 32 months, respectively, waived their right to move for dismissal. No per se rule of waiver was announced there, however, but the supreme court subsequently adopted its Rule 187, which provides: "A motion to dismiss or transfer the action under the doctrine of forum non conveniens must be filed by a party not later than 90 days after the last day allowed for the filing of that party's answer." 134 Ill.2d R. 187(a). Certainly, it is preferable that a party who finds the chosen forum unsuitable seek to remove the cause early in the proceedings to one it finds more amenable. The doctrine of forum non conveniens is based in equity, and equity does not favor those who sleep on their rights. Bell, 106 Ill.2d at 146, 88 Ill. Dec. 69, 478 N.E.2d 384. It is true that, when the instant cause commenced, there were not yet two appropriate forums and so there would have been no basis for a forum non conveniens motion. It was only when the parties all subsequently moved to Massachusetts and the court ordered a new trial that the convenience of Massachusetts as the second forum became evident. Barbara's motion for dismissal was made very shortly after the court granted the new trial. The time limit set forth in Rule 187 for filing a motion to dismiss or transfer on the grounds of forum non conveniens is clear and unambiguous and, as such, needs no interpretation. We decline, however, to read Rule 187 as an absolute prohibition against filing such a motion beyond the limit prescribed, particularly in light of Supreme Court Rule 183. That rule specifically permits that "[t]his court, for good cause shown on motion after notice to the opposite party, may extend the time for filing any pleading or the doing of any act which is required by the rules to be done within a limited period, either before or 246 after the expiration of the time." 134 Ill.2d R. 183. The court's act in allowing Barbara to file her forum non conveniens motion was within the discretion afforded it under Rule 183, and, therefore, we consider that it was timely filed. For the reasons above, the judgment of the circuit court of Du Page County is affirmed. Affirmed. INGLIS, P.J., and GEIGER, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1688664/	476 So. 2d 1348 (1985) Jorge OCHOA, Appellant, v. STATE of Florida, Appellee. No. 84-1849. District Court of Appeal of Florida, Second District. October 9, 1985. *1349 Gerald W. Medeiros, Lakeland, for appellant. Jim Smith, Atty. Gen., Tallahassee, and William I. Munsey, Jr., Asst. Atty. Gen., Tampa, for appellee. HALL, Judge. Defendant pled guilty to the charges of kidnapping with the use of a firearm and one count of armed robbery. The presumptive range under the sentencing guidelines was between nine and twelve years. The trial court departed from the guidelines and sentenced defendant to forty years in state prison. On appeal defendant challenges the sentence contending that the trial court's departure from the presumptive sentence was not based on valid, clear, and convincing reasons. In stating its reasons for departure, the trial court cited the traumatic nature of the offense and the incalculable impact upon the victim. This reason has in itself been deemed by this court to be a valid reason for departure. Green v. State, 455 So. 2d 586 (Fla. 2d DCA 1984). The trial court also cited a reason for departure which was of dubious validity; i.e., that had the victim not freed himself the defendant would have murdered him. In Albritton v. State, 476 So. 2d 158 (Fla. 1985), the supreme court recently held that a departure from the guidelines based upon both valid and invalid reasons is reversible, unless it can be shown beyond a reasonable doubt that the absence of the invalid reasons would not have affected the departure sentence. It is amply evident that the trial court's main concern in its departure from the guidelines was the psychological trauma inflicted upon the victim and his family. Judge Green went into great detail in setting forth the traumatic effects upon the victim and his family; and it is evident, beyond a reasonable doubt, that eliminating the invalid reasons, Judge Green would have entered the same sentence. In Albritton the supreme court further stated: "An appellate court reviewing a departure sentence should look to the guidelines sentence, the extent of the departure, the reasons given for the departure, and the record to determine if the departure is reasonable." Id. at 160. We find that due to the emphasis placed upon the victim's psychological trauma set forth in the reasons for the departure and in light of the record in this case that the departure is reasonable. In view of the ruling in Albritton placing the arduous task upon the District Courts of Appeal of Florida to determine whether the trial court applied the proper discretionary criteria to a sentencing deviation, we certify the following question as one of great public importance: WHEN AN APPELLATE COURT FINDS THAT A SENTENCING COURT RELIED UPON A REASON OR REASONS THAT ARE PERMISSIBLE UNDER FLORIDA RULE OF CRIMINAL PROCEDURE 3.701 IN MAKING ITS DECISION TO DEPART FROM THE SENTENCING GUIDELINES, WHAT CRITERIA SHOULD AN APPELLATE COURT ADOPT IN DETERMINING IF THE SENTENCING COURT ABUSED ITS DISCRETION IN ITS EXTENT OF DEVIATION? Affirmed. SCHEB, A.C.J., and CAMPBELL, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1817562/	471 So. 2d 560 (1985) Elizabeth Diane COLLINS, As Parent and Natural Guardian of Robert Earl Hammack, a Minor, and Elizabeth Diane Collins, Individually, Appellants, v. The SCHOOL BOARD OF BROWARD COUNTY, Florida, Appellee. No. 84-1271. District Court of Appeal of Florida, Fourth District. May 15, 1985. As Amended on Denial of Rehearing July 17, 1985. 561 Melanie G. May of Bunnell, Denman & Woulfe, P.A., Fort Lauderdale, for appellants. George W. Chesrow and Joan S. Buckley of Walton, Lantaff, Schroeder & Carson, Miami, for appellee. HURLEY, Judge. This appeal, involving an allegation of negligent supervision by a classroom teacher, stems from an incident during which the plaintiff/appellant was sexually assaulted by another male student. The jury returned a verdict in favor of the plaintiff, but the trial court granted defendant/School Board's motion for judgment in accordance with its prior motion for directed verdict, and entered judgment in favor of the School Board. We find error and reverse. Robert Hammack was a student at Rogers Middle School in December of 1980. Part of his curriculum included a shop class. Hammack is emotionally handicapped and was mixed in with regular students as part of a federally-required "mainstreaming" effort which mandates such intermingling in certain vocationally-oriented classes. The room where the shop class was held was approximately twice the size of a normal classroom. It contained numerous pieces of large machinery which the students normally used for various projects. Adjacent to the classroom were several smaller rooms; these included the teacher's office and a tool storage room, both located in front of the classroom, and a paint-finishing room and locker storage room in the rear of the classroom. On December 12, 1980, the day of the incident, a substitute teacher was present due to the regular teacher's absence. This substitute had been placed in charge of other classes at the school in the past and was well-known to the administration and to many of the students. The substitute was not certified as a shop teacher and, consequently, did not allow the students to use the power machinery. Instead, he told the students to work on projects which could be completed with hand tools, or to work on homework from other classes. As a result, the noise level on the day of the 562 incident only slightly exceeded that of a normal study period. Hammack entered the classroom that day and began to work on a Christmas project. At some point, he went to the paint room at the rear of the class to obtain paint for his project. While there, he was confronted by Robert Holloway and Tony Osborne, the two students principally responsible for the sexual assault which occurred shortly thereafter. Holloway and Osborne shut the lights off in the small room and began harassing Hammack. The substitute teacher noticed this, went back and chased the students out, and locked the paint room door. Not long afterwards, Holloway and Osborne again approached Hammack. This time, according to Hammack, Holloway began striking him and threatened to beat Hammack up unless he performed oral sex on Holloway. It was then, with Osborne and other students acting as lockouts, that Hammack, standing at the rear of the class and at least partially hidden by a portable chalkboard, was forced to perform oral sex on Holloway. The testimony as to the duration of the incident conflicted, but the plaintiff said the entire encounter lasted ten minutes. In addition to those students directly involved, other students also witnessed the assault. Paul Shields said he was standing near a workbench which was at approximately mid-point in the room, towards the far side, and noticed the commotion, at which point he moved closer to see what was happening. The testimony varied regarding the substitute teacher's whereabouts during the episode. One student, Beau Brittain, said the teacher was in front of the classroom the entire time. Another student, Paul Shields, said he was unsure, and that the substitute was either at his desk in front of the class or in his office which was located in a room off the front of the classroom. Holloway, the student who committed the assault, testified by deposition that the teacher was out of the classroom during the entire incident. The substitute teacher, however, said that he was "generally" by his desk or walking around by the tables. He further testified that he had no knowledge of the event and, in fact, did not learn of the incident until a later date. Holloway's propensity to engage in sexually aggressive conduct was a topic of some discussion among the school's administration and students alike. There was testimony, from both male and female students, of repeated incidents in which Holloway would expose himself to other students during class. One student, Elizabeth Martin, said she informed the teacher after one such episode, but was told to "go sit down." She also informed one of the deans at the school, apparently with similar results. Her parents contacted one of the school's deans, and the principal as well, in an unsuccessful attempt to have Elizabeth transferred because they feared for Elizabeth's safety in the shop class. Finally, members of the school's administration testified. The principal of Rogers Middle School, Patricia Grimes, testified by deposition and said she was aware that, prior to this incident, Holloway had been suspended at least twice for fondling and making sexually suggestive remarks to female students. She also testified she was aware that Holloway had been previously suspended for exposing himself to other students. One of the school's deans, Lincoln Anderson, testified and said he had personally suspended Holloway on one occasion because Holloway was exposing himself. He also said he was aware that an assistant principal at the school had actually witnessed an incident where Holloway exposed himself to a group of students. The case went to the jury after a five-day trial. The School Board had moved for a directed verdict at the close of the plaintiff's case, and did so again at the conclusion of all the evidence. The trial court reserved ruling each time. The jury found in favor of Hammack but, in so doing, found him thirty-four percent comparatively 563 negligent.[1] The School Board then filed a consolidated document consisting of motions for (1) judgment in accordance with prior motions for directed verdict; (2) new trial; (3) remittitur or, in the alternative, for new trial, and (4) a motion to alter or amend judgment. The trial court granted the motion for judgment in accordance with the School Board's prior motion for directed verdict, and entered judgment accordingly. In its order granting that motion, the court noted that the remaining motions were moot and, therefore, it would not rule on them. Even so, the trial court opined that it believed the other motions had merit. The court also taxed costs against the plaintiff. I STANDARD OF REVIEW When, after the entry of a jury verdict, the trial court grants a motion for judgment in accordance with the movant's prior motion for directed verdict, the ruling constitutes a deferred decision on the earlier motion for a directed verdict. Whitman v. Red Top Sedan Service, Inc., 218 So. 2d 213 (Fla. 3d DCA 1969); Reams v. Vaughn, 435 So. 2d 879 (Fla. 5th DCA 1983). Accordingly, our task in reviewing the propriety of an order granting such a motion is identical to that where an ordinary motion for directed verdict is involved. Presented with such a motion, the court must view all of the evidence in a light most favorable to the non-movant, and, in the face of evidence which is at odds or contradictory, all conflicts must be resolved in favor of the party against whom the motion has been made. Reams v. Vaughn, 435 So. 2d 879 (Fla. 5th DCA 1983); Stenback v. Racing Associates, Inc., 394 So. 2d 1128 (Fla. 4th DCA 1981). Similarly, every reasonable conclusion which may be drawn from the evidence must also be construed favorably to the non-movant. Reams; Stenback, supra. Only where there is no evidence upon which a jury could properly rely, in finding for the plaintiff, should a directed verdict be granted. Ligman v. Tardiff, 466 So. 2d 1125 (Fla. 3d DCA 1985); Hernandez v. Motrico, Inc., 370 So. 2d 836 (Fla. 3d DCA 1979). It goes without saying that a motion for directed verdict should be treated with special caution, and this is especially true in negligence cases where the function of a jury to weigh and evaluate the evidence is particularly important since reasonable people can draw various conclusions from the same evidence. Benton v. School Board of Broward County, 386 So. 2d 831 (Fla. 4th DCA 1980); Hernandez v. Motrico, Inc., supra. II THE SCHOOL BOARD'S DUTY To prevail on a theory of negligent supervision, a plaintiff must prove the basic elements of negligence. Thus, the plaintiff must establish (1) the existence of a teacher-student relationship between the parties giving rise to a legal duty on the part of the defendant-teacher to supervise the student; (2) the negligent breach of that duty; and (3) the proximate causation of the student's injury by the teacher's negligence. Ankers v. District School Board of Pasco County, 406 So. 2d 72 (Fla. 2d DCA 1981). Without question, the school was obligated to supervise Hammack and his classmates. Although a school board is not an insurer against a student being injured, the school board is entrusted with the care of the students and has a legal duty to properly supervise student activity. Rupp v. Bryant, 417 So. 2d 658 (Fla. 1982); Benton v. School Board of Broward County, 386 So. 2d 831 (Fla. 4th DCA 1980); Barrera v. Dade County, 366 So. 2d 531 (Fla. 3d DCA 1979); see also Dailey v. Los Angeles Unified School District, 2 Cal. 3d 741, 87 Cal. Rptr. 376, 470 P.2d 360 (1970). We discussed the appropriate standard of care in Benton, supra, noting that: 564 In those instances where lack or insufficiency of supervision is charged, the teacher's duty of care to the pupil is either described as reasonable, prudent, and ordinary care, or that care which a person of ordinary prudence, charged with the duties involved, would exercise under the same circumstances. Miller v. Griesel, 261 Ind. 604, 308 N.E.2d 701 (1974); Swartley v. Seattle School Dist. No. 1, 70 Wash.2d 17, 421 P.2d 1009 (1966); Connett v. Fremont County School Dist. No. 6, 581 P.2d 1097 (Wyo. 1978). Benton, 386 So.2d at 834. In Cirillo v. City of Milwaukee, 34 Wis. 2d 705, 150 N.W.2d 460 (1967), which was cited with approval in Rupp v. Bryant, 417 So. 2d 658 (Fla. 1982), the Wisconsin Supreme Court enumerated certain factors which may be helpful in determining a teacher's duty under a particular set of circumstances. Cirillo involved a teacher's absence from the classroom and there the court noted: [T]he teacher's duty is to use "reasonable care." What this means must depend upon the circumstances under which the teacher absented himself from the room. Perhaps relevant considerations would be (1) the activity in which the students are engaged, (2) the instrumentalities with which they are working (band saws, dangerous chemicals), (3) the age and composition of the class, (4) the teacher's past experience with the class and its propensities, and (5) the reason for and duration of the teacher's absence. Cirillo, 150 N.W.2d at 465. In the case at bar, the sexual assault occurred while class was in session. Since the school had an absolute right to control the students' behavior at that time, the school also had a corresponding duty to protect and supervise them. See Rupp v. Bryant, 417 So.2d at 666-67. Moreover, it is reasonable to conclude that the school's duty to actively supervise the students here was even greater than would otherwise be imposed due to the unique combination of factors in this case, including but not limited to the oversized classroom; the presence of dangerous machinery; and the intermingling of regular and emotionally and mentally handicapped students. Thus, the teacher, and the School Board, clearly owed a duty to use reasonable care in supervising the shop class in which Hammack was sexually assaulted. III BREACH OF THE SCHOOL BOARD'S DUTY The next question is whether there is competent evidence in the record to support the jury's finding that this duty was breached. As previously noted, all of the evidence, and every reasonable conclusion or inference therefrom, is to be resolved in favor of Hammack, the non-movant. All conflicts in the evidence are to be reconciled in a like manner. Reams v. Vaughn, 435 So. 2d 879 (Fla. 5th DCA 1983); Stenback v. Racing Associates, Inc., 394 So. 2d 1128 (Fla. 4th DCA 1981); Hernandez v. Motrico, Inc., 370 So. 2d 836 (Fla. 3d DCA 1979). The testimony regarding the duration of the assault and the exact whereabouts of the teacher is in conflict. Resolving these conflicts in favor of Hammack, as we are required to do, we hold that the jury was entitled to find that the assault lasted up to ten minutes and that the substitute teacher was absent from the classroom during all or a great part of this time. Moreover, even if we were in a position to assume that the substitute teacher was, as some testimony suggested, at his desk in front during the assault, it is evident from his own testimony that he was not adequately supervising the class. The substitute teacher, at two separate times during his testimony, stated that he had a clear view from his desk to the back of the room. Implicit in this testimony is the suggestion that the front of the classroom provided an adequate vantage point to supervise all of the students. If this were true, the assault would not have gone 565 unobserved by the teacher. Furthermore, the adequacy of the teacher's supervision was also called into question by the testimony from at least one student that the substitute teacher, even when present, had no control over the class. Beau Brittain, a member of the shop class, testified that the environment of the shop class was "disruptive" and that the substitute teacher, had "no authority whatsoever in the class... ." In summary, the record contains evidence, upon which a jury could properly rely, that the teacher not only failed to actively supervise the class, but failed to exercise any reasonable care, and thereby breached the duty owed Hammack. IV FORESEEABILITY OF THE HARM SUFFERED Our next step, having concluded that the evidence could support a finding that the teacher owed a duty and that the duty was breached, is to determine whether the jury could find that the harm suffered by Hammack was proximately caused by the teacher's negligence. In our view, the evidence in this case does support a reasonable inference, available to the jury, that a causal relationship existed between the negligent supervision and the physical assault on Hammack by a fellow student. A well-expressed definition of foreseeability appears in Goode v. Walt Disney World Co., 425 So. 2d 1151 (Fla. 5th DCA 1982): A foreseeable consequence is one which a prudent man would anticipate as likely to result from an act and are those that happen so frequently that they may be expected to happen again and are therefore probable consequences... . Although the actual harm that resulted may be seen as not foreseeable as a matter of law by the court, it is not necessary that the tortfeasor be able to foresee the exact nature and extent of the injuries in the precise manner in which they occurred; rather, all that is necessary is that the tortfeasor be able to foresee some injury likely to result in some manner as a consequence of his negligence. Goode, 425 So.2d at 1155-56. The Florida Supreme Court, in Rupp v. Bryant, 417 So. 2d 658 (Fla. 1982), further elaborated on the question of foreseeability within the framework of an allegation of negligent supervision. In Rupp, the court acknowledged the existence of two schools of thought regarding the foreseeability of injuries in negligent school supervision cases. One line of cases, characterized by Ohman v. Board of Education, 300 N.Y. 306, 90 N.E.2d 474 (1949), takes the position that there can be proximate causation between a student's injuries and a teacher's absence only where the injury could have been prevented by the teacher's presence. See Ohman, supra; Morris v. Ortiz, 103 Ariz. 119, 437 P.2d 652 (1968); Segerman v. Jones, 256 Md. 109, 259 A.2d 794 (1969). This position was disapproved of by the court in Rupp. See Rupp v. Bryant, 417 So.2d at 668-69 n. 26. The second and, we think, better-reasoned line of cases is exemplified by the California Supreme Court's en banc decision in Dailey v. Los Angeles Unified School District, 2 Cal. 3d 741, 87 Cal. Rptr. 376, 470 P.2d 360 (1970). In Dailey, a sixteen-year-old high school student died from injuries sustained during a "slap boxing" fight which took place in the school gymnasium between class periods. The "slap fight" took place in front of a crowd of approximately thirty students and continued for five to ten minutes. The encounter ended when one of the participants fell backwards onto the pavement. He died that evening. Two gym instructors were in the area, but were engaged in other activities and, thus, were unaware of the students' fight. Nonetheless, the court held that the evidence was sufficient to support a finding that the failure to adequately supervise the students was the proximate cause of the victim's death. As our supreme court noted, Dailey stands for the proposition that "certain student misbehavior is itself foreseeable and 566 therefore is not an intervening cause which will relieve principals or teachers from liability for failure to supervise... ." Rupp, 417 So.2d at 668. Further, the court stated that Dailey is more consistent with established principles of Florida negligence law: We perceive that the Dailey standard more nearly comports with Florida negligence law which recognizes that the intervening negligence of a third party does not relieve the original tortfeasor of his negligence if the intervening negligence is foreseeable. See, Gibson v. Avis Rent-A-Car System, Inc., 386 So. 2d 520 (Fla. 1980)... . A standard which recognizes that certain student misconduct will foreseeably occur when students are left unsupervised fulfills the definition in Gibson which finds an intervening cause foreseeable when "`in the field of human experience' the same type of result may be expected again." [Citation omitted.] Rupp v. Bryant, 417 So.2d at 669. See also Leahy v. School Board of Hernando County, 450 So. 2d 883 (Fla. 5th DCA 1984); Hoyem v. Manhatten Beach City School District, 22 Cal. 3d 508, 150 Cal. Rptr. 1, 585 P.2d 851 (Cal. 1978); Loranger v. State, 448 So. 2d 1036 (Fla. 4th DCA 1983). Turning to the case at bar, we believe the major, conspicuous deficiency in the School Board's foreseeability argument is its meticulous specificity regarding just what is or is not foreseeable. In its brief, it argues that "the substitute teacher had no reason to anticipate or foresee that if Robert Holloway was not under constant supervision, he would force a male classmate to perform oral sex upon him." The problem with this formulation is that it simply is not necessary "that the tortfeasor be able to foresee the exact nature and extent of the injuries in the precise manner in which they occurred... ." Goode v. Walt Disney World Co., 425 So. 2d 1151 (Fla. 5th DCA 1982). Thus, the exact factual circumstances of the incident need not have been foreseen, only the general type of harm. Here, the incident which gave rise to this suit can be characterized as a physical assault, arguably in the nature of a serious physical attack. The cases are numerous where a student has been physically assaulted, Ferraro v. Board of Education of City of New York, 32 Misc. 2d 563, 212 N.Y.S.2d 615, aff'd, 14 App.Div.2d 815, 221 N.Y.S.2d 279 (1961); Cirillo v. City of Milwaukee, 34 Wis. 2d 705, 150 N.W.2d 460 (1967); violently attacked, Beck v. San Francisco Unified School District, 225 Cal. App. 2d 503, 37 Cal. Rptr. 471 (1964); Silverman v. New York, 28 Misc. 2d 20, 211 N.Y.S.2d 560, aff'd, 15 App.Div.2d 810, 225 N.Y.S.2d 77 (1962); or even killed, Dailey v. Los Angeles Unified School District, 2 Cal. 3d 741, 87 Cal. Rptr. 376, 470 P.2d 360 (1970); Ziegler v. Santa Cruz City High School District, 168 Cal. App. 2d 277, 335 P.2d 709 (1959); and in these cases the courts have had little difficulty in finding "that a failure to prevent injuries caused by the intentional or reckless conduct of the victim or a fellow student" may be the proximate cause of the injury itself. Dailey, 470 P.2d at 364. Given the evidence in the case at bar, we believe the jury was entitled to find that the substitute teacher, as an employee of the School Board, failed to exercise reasonable care in performing his supervisory duty, and that his negligence was in fact the proximate cause of the injuries suffered by Hammack. Consequently, we hold that the trial court erred in granting the School Board's motion for a directed verdict. As noted earlier, the trial court declined to rule on the School Board's other motions, believing them to be moot. The School Board now contends, and we agree, that the case should be remanded to allow the lower court to rule on the remaining motions. See Van Dusen v. Dobson, 457 So. 2d 1062 (Fla. 2d DCA 1984); Navarro v. City of Miami, 402 So. 2d 438 (Fla. 3d DCA 1981). Accordingly, we reverse the trial court's order granting the School Board's motion for directed verdict, and instruct the court to reinstate the jury's verdict. Upon remand, the trial court may rule on the School Board's remaining motions. *567 REVERSED AND REMANDED WITH INSTRUCTIONS. WALDEN and BARKETT, JJ., concur. NOTES [1] Apparently the jury concluded that the plaintiff was negligent in failing to call out for help. The propriety of this finding has not been contested by cross appeal.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2596581/	938 F. Supp. 861 (1996) Mashell C. DEES, Plaintiff, v. JOHNSON CONTROLS WORLD SERVICES, INC., Defendant. Civil Action No. CV295-142. United States District Court, S.D. Georgia, Brunswick Division. August 20, 1996. 862 John S. Myers, St. Marys, GA, Joseph Egan, Jr., Egan, Lev & Siwica, Orlando, FL, for plaintiff. Wallace Eugene Harrell, Gilbert, Harrell, Gilbert, Sumerford & Martin, P.C., Brunswick, GA, Guy O. Farmer, II, Amy W. Littrell, Foley & Lardner, Jacksonville, FL, for defendant. ORDER ALAIMO, District Judge. Plaintiff, Mashell C. Dees ("Dees"), has brought the present sexual harassment action, seeking damages under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and state law. Currently before the Court is a motion for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, by Defendant, Johnson Controls World Services, Inc. ("World Services"). For the reasons stated below, World Services' motion will be GRANTED. FACTS This action was filed by Dees due to the treatment that she received while employed by World Services in the Kings Bay Naval Submarine Fire Department ("fire station").[1] Dees was employed in the fire station as an administrative assistant. World Services has a contract with the U.S. Navy for the maintenance and operation of the Kings Bay Naval Submarine Base (including its fire station), located in St. Marys, Georgia. 863 Dees claims that she was subjected to constant, unwelcome, and offensive sexual advances by World Services' male employees in violation of Title VII of the Civil Rights Act of 1964 and Georgia law.[2] She claims that those advances created a hostile work environment and that the treatment she received demeaned and degraded her and other women in World Services' employ. Specifically, Dees claims that four male co-workers created the hostile work environment. The co-workers are Waymon Rainey ("Rainey"), Chief of the Kings Bay Naval Submarine Base Fire Station, Jerry Jacobs ("Jacobs"), Assistant Chief of Fire Protection, Alfred Amerson ("Amerson"), Assistant Chief of Fire Protection, and Danny Stewart ("Stewart"), Captain in the Fire Protection Department. Dees has been employed by World Services since November, 1989. From November, 1989, until May, 1990, Dees served in a temporary capacity as an "on call" secretary for the Human Resources Department. Dees became a full-time Employees Relations Clerk in May, 1990, and remained in that position until September, 1991. In September, 1991, she was transferred to the fire station and worked there for nearly three years, until August, 1994. Once the incidents leading to this suit were reported, Dees was transferred to the Transportation Department and then to the Supply Department. Dees is still employed in some capacity by World Services.[3] In August, 1994, after considerable harassment in the fire station, Dees made a complaint to the Human Resources office of World Services. Specifically, she met with Carol Pierce ("Pierce") and Joe Lewis ("Lewis"), with whom she had worked during her tenure in that office. Dees went directly to the Human Resources office to complain of workplace harassment pursuant to the "company policy" in effect at that time. Dees claims that she chose not to complain of the harassment prior to August, 1994, because she was in fear of her supervisors, Rainey and Jacobs. Dees asserts that as a result of the pervasive harassment and improper behavior within the fire station, she was unable to work effectively in her position. After her meeting with Lewis and Pierce, Dees was asked to speak with Art Robb ("Robb"), the Project Manager, concerning her allegations. Robb was unavailable to speak with Dees immediately, but met with her within three days following Dees' meeting with Lewis and Pierce. During their first meeting, Dees and Robb discussed all of her allegations. Beverly Edwards ("Edwards"), the Coordinator of the Exceeding in Customer Satisfaction (EICS) program, was also present during Dees' discussion with Robb. After that initial meeting with Robb, Dees returned to work at the fire station. She claims that Rainey became increasingly abusive to her following her discussion with Robb. Roughly two weeks later, as a result of increasing harassment, she returned to the Human Resources office and once again discussed the entire matter with Lewis. Lewis informed Dees that an investigation had not yet been started and asked her to put everything in writing so that a formal investigation could be started. Lewis also asked Dees whether she wanted to speak with Robb at that time. Given her fragile emotional state during the conversation with Lewis, Dees declined to meet with Robb and went home. The following morning, Robb telephoned Dees and asked her even pressured her to 864 meet with him immediately to discuss her allegations. Dees again declined to meet with Robb on that date and, instead, telephoned her attorney. Shortly thereafter, also in August, 1994, Dees met with Robb to give him a written summary of the incidents serving as the basis of her claims. During that second meeting with Robb, Dees was asked whether she could return to the fire station. She responded that "there was no way I would go back and work in the same department ... with Chief Rainey...." (Dep. of Dees at 78). Robb then immediately transferred Dees out of the fire station to the Transportation Department. In fact, at the conclusion of their meeting, Robb walked Dees across the street to meet her new supervisor, Pat Yochum. Dees was not required to work at the fire station after she filed her written complaint. Within several weeks to a month, World Services sent two individuals to Kings Bay in order to investigate the matter. Linda Ramsey ("Ramsey") and Truli Beemis ("Beemis"), two female Human Resources Specialists from other company locations, conducted an investigation and interviewed Dees and other witnesses concerning the alleged harassment within the fire station. The investigation was completed under the direction of Bud Wellman ("Wellman"), the Corporate Manager for Human Resources-Operations. Dees was not questioned at her workplace, but rather spent over four hours discussing the matter with Ramsey and Beemis at a local Holiday Inn. Dees recounted, in detail, the alleged incidents of harassment to Ramsey and Beemis. After the investigation was completed, Dees received a call from Ramsey and Wellman, who informed her that Jacobs and Stewart had been fired. She was also informed that one employee had been placed on an indefinite conditional employment status and that other employees had been formally reprimanded. The employee placed on indefinite conditional employment was Rainey. Dees claims that World Services had no "step-by-step" written sexual harassment policy until the summer of 1994. Dees admits in her deposition, however, that World Services may have had a written sexual harassment policy as early as 1989, while she worked in Human Resources. (See Dep. of Dees at 90-91). Dees further admits that World Services did maintain a one-page, written sexual harassment policy, which was required to be posted throughout the company, as early as 1993. (See Aff. of Dees at 5).[4] She also admits that sometime between 1993 and 1994, the entire fire station, herself included, received sexual harassment training.[5] Dees states that other women filed complaints alleging sexual harassment prior to her filing a complaint. She also admits, however, that she was largely unaware of the substance of the other complaints.[6] Dees is still employed with World Services and has received pay raises and above average performance critiques from her current supervisor, Frank Smith ("Smith"). In her present position, Dees has had one isolated problem involving another male co-worker.[7]865 She reported the problem to Smith and the Human Resources office quickly settled the matter to her satisfaction. DISCUSSION I. Summary Judgment Summary judgment requires the movant to establish the absence of genuine issues of material fact, such that the movant is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); Lordmann Enter., Inc. v. Equicor, Inc., 32 F.3d 1529, 1532 (11th Cir. 1994), cert. denied, ___ U.S. ___, 116 S. Ct. 335, 133 L. Ed. 2d 234 (1995). After the movant meets this burden, "the non-moving party must make a sufficient showing to establish the existence of each essential element to that party's case, and on which that party will bear the burden of proof at trial." Howard v. BP Oil Co., Inc., 32 F.3d 520, 524 (11th Cir.1994) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). The non-moving party to a summary judgment motion need make this showing only after the moving party has satisfied its burden. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991). The court should consider the pleadings, depositions and affidavits in the case before reaching its decision, Fed.R.Civ.P. 56(c), and all reasonable inferences will be made in favor of the non-movant. Griesel v. Hamlin, 963 F.2d 338, 341 (11th Cir.1992). II. Sexual Harassment Claims Title VII of the Civil Rights Act of 1964 prohibits discrimination by an employer "against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a)(1) (1994). This prohibition extends to sexual harassment in the workplace. Henson v. City of Dundee, 682 F.2d 897 (11th Cir.1982). A. Quid Pro Quo Dees does not specifically allege quid pro quo sexual harassment. Quid pro quo sexual harassment involves a supervisor's attempt to garner sexual consideration from an employee by offering job benefits as a quid pro quo. See Mills v. Amoco Performance Prod., Inc., 872 F. Supp. 975, 989 (S.D.Ga.1994). Quid pro quo sexual harassment requires proof that plaintiff's acceptance of the harassment is an express or implied condition to receiving a job benefit or not receiving negative treatment. Sowers v. Kemira, Inc., 701 F. Supp. 809, 823 (S.D.Ga. 1988) (finding a prima facie case of quid pro quo sexual harassment when plaintiff's rejection of supervisor's advances resulted in delay of promotion). In the case at bar, however, no evidence has been presented and no claims have been specifically asserted to indicate that quid pro quo harassment has taken place. Under the facts of this case, the Court has little trouble in concluding that Dees was not a victim of quid pro quo sexual harassment. B. Hostile Work Environment Viewing the evidence in the light most favorable to Dees, it is clear to the Court that she was harassed by the individuals named in her complaint. Dees became the brunt of many office jokes and rumors. She was grabbed, pushed, and even locked in a bathroom on at least one occasion. She was forced to endure behavior that the Court finds intolerable in any situation, but especially within the workplace. Dees seeks to recover under the hostile work environment theory of sexual harassment. In order to make out a prima facie case of hostile work environment sexual harassment, a plaintiff is required to show (1) membership in a protected group; (2) subjection to unwelcome sexual harassment; (3) that the harassment was based on sex; (4) that the harassment affected a term, condition, or privilege of employment, in that it was sufficiently severe or pervasive "to alter the conditions of [the victim's] employment and create an abusive working environment," 866 Henson, 682 F.2d at 904; and (5) that the company knew or should have known of the harassment and failed to take remedial action. Huddleston v. Roger Dean Chevrolet, Inc., 845 F.2d 900, 904 (11th Cir.1988); Sparks v. Pilot Freight Carriers, Inc., 830 F.2d 1554, 1557 (11th Cir.1987). An employer can rebut this prima facie showing by "establishing that the events did not take place, or were not sufficiently severe to be actionable, or by pointing to prompt remedial action reasonably calculated to end the harassment." Sanchez v. City of Miami Beach, 720 F. Supp. 974, 980 (S.D.Fla.1989) (emphasis added). Therefore, the relevant question is not whether Dees was harassed, but rather whether the named defendant, World Services, knew or should have known of the harassment and reacted promptly. For the purposes of this motion, World Services does not expressly challenge the first four elements of Dees' prima facie case. Rather, World Services argues that it took prompt remedial action which prevents it from being held liable for Dees' hostile work environment claims. The Eleventh Circuit has held that: Strict liability is illogical in a pure hostile environment setting. In a hostile environment case, no quid pro quo exists. The supervisor does not act as the company; the supervisor acts outside "the scope of actual or apparent authority to hire, fire, discipline, or promote." Corporate liability, therefore, exists only through respondeat superior, liability exists where the corporate defendant knew or should have know of the harassment and failed to take prompt remedial action against the supervisor. Steele v. Offshore Shipbuilding, Inc., 867 F.2d 1311, 1316 (11th Cir.1989), reh'g denied, 874 F.2d 821 (11th Cir.1989) (citing Henson, 682 F.2d at 905; Bundy v. Jackson, 641 F.2d 934, 943 n. 8 (D.C.Cir.1981)). Thus, the proper standard to apply in a pure hostile environment case, as opposed to a quid pro quo case, is the respondeat superior standard. Although strict liability may, at times, be imposed on an employer for harassment caused by its employees, both hostile environment and quid pro quo sexual harassment must be present. See Steele, 867 F.2d at 1316. Since quid pro quo is not present in this case, direct liability cannot attach to World Services. Thus, to prevail against World Services, Dees must prove that it knew or should have known of the harassment and failed to take prompt remedial action. The Court cannot imagine a quicker or more prompt response to a harassment complaint than the actions taken by World Services in the case at bar. Dees attempts to create a material issue by arguing that she was afraid to file a complaint because she felt that the complaint would not be investigated and that her supervisors, Rainey and Jacobs, would be informed of her actions. However, her suggestions that World Services had a practice of not investigating sexual harassment complaints is contradicted by her own testimony in this matter. In fact, Dees claims that another female co-worker, Clark, made similar claims and that an investigation was completed concerning those claims. (See Aff. of Dees at 10 (referencing the prior, unrelated investigation conducted by World Services)).[8] Under the facts presented, Dees' argument does not give rise to a genuine issue of material fact. Dees also attempts to avoid the dismissal of her harassment claims by arguing that Rainey and the other male co-workers named in her complaint were acting as agents for World Services when the harassment took place. The Eleventh Circuit has held that "in so called `tangible job detriment' harassment cases, a supervisory employee acts as an agent of his employer under 867 Title VII when that employee uses the authority delegated to him by the employer to harass the plaintiff." Vance v. Southern, 863 F.2d 1503, 1514-15 (11th Cir.1989), appeal after remand, 983 F.2d 1573 (11th Cir. 1993), cert. denied, ___ U.S. ___, 115 S. Ct. 1110, 130 L. Ed. 2d 1075 (1995). For World Services to be directly liable under this theory, Dees must show that the male co-workers in the fire station used authority actually delegated to them by World Services to make or threaten to make employment decisions detrimental to Dees. Id. at 1515 (citing, Sparks, 830 F.2d at 1559). Agency theory as a means for direct liability, however, must fail in the case at bar since Dees has not shown that any of the individuals named in her complaint used authority actually delegated to them by World Services to make employment decisions or create a hostile work environment detrimental to Dees. In fact, Dees stated that Rainey had given her good evaluations and that she had received raises and a Presidential Award while working in the fire station. (See Dep. of Dees at 116-17; 143). Although the men named in her complaint may have harassed Dees, their actions fell outside the scope of their employment. Once Dees filed a written complaint alleging inappropriate conduct and sexual harassment, World Services not only took prompt, but immediate, remedial action. Dees was personally escorted to a new job assignment on the day that she turned in her written complaint to the Human Resources office. Once a more permanent position could be established within the company, Dees was transferred and has continued her employment with World Services since that transfer. An immediate investigation concerning Dees' allegations was conducted by World Services within a reasonable time. The company sent two female employees from different locations to complete a thorough investigation. Dees was interviewed in detail and away from the workplace by those two neutral investigators. When the investigation was completed, Dees was personally informed that Jacobs and Stewart had been fired. She was also personally informed that another employee (i.e., Rainey) was placed in a conditional employment status, which is the functional equivalent of probation. Dees was further informed that as a result of the investigation, other employees in the fire station were issued formal reprimands. In her new position, Dees has received pay raises and above average evaluations. The Human Resources office has responded quickly and professionally to her subsequent work-related complaints. Finally, Dees has apparently received the complete support of her new supervisor. The problems that Dees encountered during her employment at the fire station were more than unfortunate. The Court fully agrees that she should not have had to endure any harassment while working for World Services. Given Dees' prior experience in the Human Resources office and her knowledge of the sexual harassment policies, albeit briefly written at first, she could have made her concerns known to World Services sooner than August, 1994. Once she lodged a formal complaint in writing, World Services acted swiftly to investigate the matter and to ameliorate the working conditions within the fire station. Moreover, Dees cannot, in good faith, claim that she feared making her own claim based upon the outcome of Clark's complaint. Dees admits to having little knowledge of the substance of Clark's complaint until after the matter had been resolved. Viewing the evidence in the light most favorable to Dees, the non-movant, the Court concludes that World Services not only took prompt, but immediate remedial action to resolve Dees' sexual harassment complaint. Summary judgment for World Services will be GRANTED on Dees' Title VII sexual harassment claims. III. State Law Claims Dees has also alleged numerous state law claims against World Services. Since the federal issues pending in this litigation have been disposed, the Court believes that the remaining state law issues should be left to the courts of Georgia. The Court declines to retain discretionary supplemental jurisdiction over the remainder of this case. See 28 U.S.C. § 1367(c)(3). *868 CONCLUSION The Court has given careful consideration to the law governing Dee's claims and to World Services' motion for summary judgment. For the reasons stated above, Defendants' motion for summary judgment is hereby GRANTED. SO ORDERED. NOTES [1] A companion case was filed along with the case at bar. See Clark v. Johnson Controls World Services, Inc., No. CV295-141 (1995). Susan A. Clark ("Clark") filed a suit factually similar to this case. World Services' motion for summary judgment in Clark's case was granted on June 24, 1996, ___ F.Supp. ___ by Order of the Court. [2] In her complaint, Dees alleges that World Services' employees are liable to her for battery, invasion of privacy, and false imprisonment. In February, 1996, Dees' motion to amend her complaint was granted by United States Magistrate Judge James E. Graham. (See Dkt. # 17). Among other things, Dees amended her complaint to include the additional state tort claims of negligent hiring, negligent retention, failure to maintain a workplace free from unwanted sexual misconduct and harassment, and intentional infliction of emotional distress. Since the Court will grant World Services' motion for summary judgment, a lengthy discussion of the state law claims is unnecessary. [3] In her complaint, Dees states that she was employed at the naval submarine base fire station from November, 1989, until August, 1994. (See Compl. at ¶ 5). However, her affidavit filed in opposition to World Services' motion for summary judgment clarifies her exact employment dates and locations. The Court accepts the employment facts in her affidavit to be true. (See Aff. of Dees at ¶ 3). [4] Although Dees asserts that Rainey would not allow the policy to be posted in the fire station, she had actual notice of a written policy prohibiting sexual harassment in the workplace as early as either January or February, 1993. (See Aff. of Dees at 5). [5] There is some confusion in the record concerning the level of involvement that Dees had in these training seminars. It is clear that Dees attended at least portions of the sexual harassment training. She contends, however, that her involvement was limited due to several interruptions during the training sessions. [6] In the companion case, Clark filed a suit substantially similar to this case. Clark first complained to World Services' Human Resources office in March, 1994, alleging inter alia, violations of Title VII. Dees asserts that she did not complain to Human Resources prior to August, 1994, because she feared reprisal from her superiors. Dees also claims that she felt her complaint would not be handled appropriately because of Clark's lack of success in her complaint to Human Resources. The Court does not understand how Dees could have used Clark's situation as a factor in her decision-making if Dees was unaware of the substance of Clark's claims at the time of Clark's complaint. See Dep. of Dees at 113. [7] Dees claims that a male co-worker called her at home and stated that he was "in love" with her. Human Resources consulted with the employee after Dees informed her supervisor of the incident. The employee ceased all offensive contact with Dees following the meeting with Human Resources. Dees claims that while other employees have made derogatory comments about her, she has had no other major conflicts in her new position. [8] Dees claims that no investigation took place after Clark filed her sexual harassment complaint against Jacobs with the Human Resources office. However, Dees contradicts that assertion in the affidavit filed in support of her claims. In that affidavit, Dees states that "[d]uring the investigation of Clark's allegations against Jacobs ..." she was directed not to discuss the matter with Human Resources. (See Aff. of Dees at 10; see also Dep. of Dees at 55). Dees cannot make conflicting statements and expect the Court to assume both to be true. The Court finds that there was an investigation made by World Services in prior sexual harassment claims filed before Dees filed her formal claim.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1382883/	486 P.2d 581 (1971) STATE of Oregon, Respondent, v. Oliver Lee CRENSHAW, Appellant. Court of Appeals of Oregon, Department 2. Argued and Submitted May 18, 1971. Decided July 1, 1971. Gary D. Babcock, Public Defender, Salem, argued the cause for appellant. With him on the brief was Benhardt E. Schmidt, Portland. 582 Thomas H. Denney, Asst. Atty. Gen., argued the cause for respondent. With him on the brief were Lee Johnson, Atty. Gen., and Jacob B. Tanzer, Sol. Gen., Salem. Before SCHWAB, C.J., and FORT and THORNTON, JJ. THORNTON, Judge. Defendant was convicted of second degree murder by allegedly "pushing or shoving" Irene Marty over a cliff into the Columbia river gorge. He appeals on several grounds, including that there was not sufficient evidence to make a jury question. We agree. The evidence of the alleged crime was entirely circumstantial. About noon on the day of the episode defendant became acquainted with a man named Leonard Pruchniewski in a secondhand store in east Multnomah County operated by defendant's brother. Soon thereafter defendant and Pruchniewski went across the street to a tavern. They began drinking beer. In a few minutes they became acquainted with Irene Marty, who had entered the tavern and was arguing with the tavern keeper for refusing to serve her because she was allegedly intoxicated. Shortly thereafter, at Irene's request, the three went to another tavern in defendant's car where they consumed more beer. After several hours' drinking they bought 12 bottles of beer and drove out along the old Columbia river highway in the direction of the Vista House. During the trip both men made certain advances toward Irene which apparently were in no way rebuffed. Arriving at a turnout near the gorge about one mile west of the Vista House, the three got out of the car, then stood around for a few minutes drinking. At Pruchniewski's suggestion the trio then decided to go down a very steep trail leading from the turnout in the direction of the river, to continue their drinking and possibly engage in other activities. Defendant testified that Pruchniewski repeatedly expressed concern that defendant would drive off and leave him and therefore insisted that he go down the trail also. All three were intoxicated. Defendant testified that he was unfamiliar with the terrain and unaware of the existence of the cliff until some time after the incident occurred. The evidence was that the edge of the cliff, though only 250-300 ground feet distant, was not visible from the turnout nor from the trail because of the dense foliage. Defendant stated that after they had gone a few steps and were standing in a small open area, Pruchniewski suddenly and without any provocation struck him in the mouth sending him tumbling head-over-heels some 75 to 100 feet down the steep incline. Defendant said that when he stopped tumbling he could no longer see either of his companions, although he did hear the sound of something moving through the brush. He slowly made his way back up the slope to the road, but by a different route in order to avoid a further encounter with his alleged assailant. There was evidence that both the defendant and Pruchniewski received some visible bruises and abrasions during the afternoon. When defendant reached the road Pruchniewski was waiting, but Irene was nowhere to be seen. When defendant inquired as to her whereabouts and suggested going back down to get her, Pruchniewski said he was "too drunk to go back down there." After more discussion, in which defendant claimed he urged that they go back for Irene and his companion insisted he was too drunk to go back, they left the area and returned to the brother's secondhand store. By now it was late afternoon or early evening. Although several persons were in the store, his brother was not there. Defendant and others testified that during the discussion that followed, Pruchniewski stated that "nothing had happened" to the woman; that "she got back and walked off." Defendant requested Pruchniewski to stay there and await his brother's return, who would then assist them in deciding what to do about the missing 583 woman. Despite defendant's request, Pruchniewski suddenly bolted and went back to the same neighborhood tavern. When the brother did not return, defendant persuaded two of his friends who were in the store to go out and search for the woman. This they did, but the defendant could not identify the turnout. A day or so later another search was instigated by defendant and two other acquaintances without success. Pruchniewski did not testify at the trial.[1] The evidence offered by the state consisted mainly of testimony of defendant's friends and relatives to whom he had voiced various statements of concern and anxiety over the disappearance of the woman. There also was testimony that defendant, in response to inquiries by a police officer, had falsely informed the officer that he had let the woman out of his car in Gresham on the day of the incident. Defendant admitted this false statement prior to trial. In addition he had told his former landlady that the woman had been found when, in fact, she had not. The landlady also testified that he had evidenced great fear of the police over the incident and had told her not to tell anyone he was at home. The decedent's body was found fully clothed several months later at the base of the 500-600 foot cliff where the incident occurred by a group of Boy Scouts. The coroner testified that the body was badly decomposed but the skeleton showed numerous fractures which apparently resulted from the fall and caused her death. There was no other evidence of foul play. Defendant, upon learning that a woman's body had been found in the area, voluntarily returned from California, turned himself in and made a purportedly complete statement in the district attorney's office. At the trial, defendant sought to explain his fear of the police by testifying that several months before he had been picked up by the police as a possible suspect in a bank robbery and held in the county jail for some two months, then released when he was found to have no connection with the crime. The state contends that the evidence of defendant's consciousness of guilt was sufficient to support a verdict that the corpus delicti of the homicide and defendant's participation in the homicide had been proved. We review the evidence in the light most favorable to the state and must sustain the trial court's ruling if there is any substantial evidence to support the verdict. State v. Freeman, Or. App., 92 Adv.Sh. 183, 184, 481 P.2d 638 (1971). As both parties concede, most of the evidence involved in this case was circumstantial. However that fact does not prevent a conviction. Circumstantial evidence alone is sufficient to establish any necessary element of a crime. State v. Hanna, 1 Or. App. 110, 459 P.2d 564 (1969). In State v. Zauner, 250 Or. 105, 110, 441 P.2d 85, 87 (1968), our Supreme Court said: "* * * The jury is also entitled to draw all reasonable inferences that are capable of being made from the circumstantial evidence. The trial court, and this court, have the difficult task of determining whether the inferences that can be drawn are sufficiently reasonable so as to amount to evidence proving each material element of the crime beyond a reasonable doubt." It is the duty of this court when a question is properly raised to view the evidence and determine "`* * * whether the inferences that can be drawn are sufficiently reasonable * * .'" State v. Freeman, supra, 92 Adv.Sh. at 186, 481 P.2d at 639. We cannot agree with the state that evidence of defendant's expressions of anxiety 584 and false statements to the officer and his former landlady were sufficient to support a verdict, since there was no proof of the corpus delicti of a homicide and there is no evidence whatsoever that decedent was pushed over the cliff into the Columbia gorge or that defendant participated in such an act. From a review of the entire record, it is our conclusion that there was a total want of evidence to sustain the charge that defendant had pushed or shoved the decedent to her death, or from which the jury could have reasonably inferred that defendant was guilty of homicide.[2] The judgment of the trial court is reversed and this cause is remanded with directions to dismiss this action and discharge the defendant. Reversed and remanded with directions. NOTES [1] A footnote in defendant's brief states that Pruchniewski was also indicted and tried on the same charge, but that the charge was subsequently dismissed after the court sustained Pruchniewski's motion for directed verdict of acquittal after the state had put on its evidence. (Multnomah County Case No. C-58086). [2] The trial judge in denying defense counsel's motions referred to the state's proof as follows: "I recognize that this is a critical point in the case, and it is a pretty thin question as to whether or not there is evidence sufficient to make a jury question * * . " * * "I realize it is a close question, but I am going to submit it to the jury."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1099334/	590 So. 2d 369 (1991) Ex parte David Ray DUREN. (Re David Ray Duren v. State). 1900162. Supreme Court of Alabama. September 13, 1991. Rehearing Denied November 15, 1991. Rory Fitzpatrick, Don E. Gorton III and Patricia M. McCarthy of Bingham, Dana & Gould, Boston, Mass., for appellant. James H. Evans, Atty. Gen., and Sandra J. Stewart, Asst. Atty. Gen., for appellee. 370 MADDOX, Justice. David Ray Duren appealed from the denial of his Rule 20, A.R.Crim.P.Temp., petition for relief from his conviction of capital murder and sentence of death. The Court of Criminal Appeals affirmed. 590 So. 2d 360. On certiorari review he contends that he was denied effective assistance of counsel during his trial and during his sentencing hearing. In 1984, Duren was convicted of the October 20, 1983, robbery and murder of Kathleen Bedsole. On appeal, the Court of Criminal Appeals remanded the case to the trial court for the entry of specific written findings of fact relating to the punishment phase of the trial; on return to remand on October 14, 1986, that court affirmed Duren's conviction, and it denied rehearing on November 12, 1986, Duren v. State, 507 So. 2d 111 (Ala.Cr.App.1986); and this Court affirmed his conviction on April 10, 1987, Ex parte Duren, 507 So. 2d 121 (Ala. 1987). The United States Supreme Court denied certiorari. Duren v. Alabama, 484 U.S. 905, 108 S. Ct. 249, 98 L. Ed. 2d 206 (1987). Duren filed with the Jefferson Circuit Court a petition for Rule 20, A.R.Crim. P.Temp., relief, which that court denied. On August 24, 1990, the Court of Criminal Appeals affirmed that denial. The Alabama Court of Criminal Appeals listed the facts surrounding the murder, as shown in the trial court's findings of fact, as follows: "The victim in this case, Kathleen Bedsole, and her companion, Charles Leonard, were on a date on October 20th, 1983, and had left the victim's home at approximately 9:00 p.m. with the intention of going to visit some haunted houses sponsored by radio stations in the Birmingham area, as this was in the Halloween season. "Sometime after leaving the victim's home, the couple had parked at a location in the Huffman area and, according to testimony of witness Charles Leonard, had been there some five to ten minutes prior to two individuals coming up to the car. One of the individuals was armed with a pistol and was identified by witness Leonard as being the defendant, David Ray Duren. The two individuals instructed the victim and her companion, Charles Leonard, to get out of the car and, further, that, if they did as they were instructed, they would be okay. "The victim, Kathleen Bedsole, and her companion, Charles Leonard, were subsequently placed in the trunk of the automobile, and the car drove from that location. The witness Leonard testified that on being placed in the trunk that the car traveled for a short distance and stopped. He heard one of the car doors open and, after a short time span, close, and the car proceeded on. After traveling a short distance, the car appeared to get on an interstate highway and traveled for some length of time. On exiting the interstate, the car shortly thereafter entered what appeared to be a drive-in restaurant, and a conversation was overheard between one of the two defendants and an employee of the restaurant. Only a few words were heard, but one of them appeared to be an exclamation shouted by one of the restaurant employees of the word, `robbery.' Immediately thereafter, the car sped away from the location. "The car again drove for some distance and appeared to get back on an interstate and drove to a location in the eastern section of Jefferson County known as Trussville. The car drove to a secluded location wherein the victim, Kathy Bedsole, and her companion, Charles Leonard, were taken from the trunk of the car. The second defendant, later identified as Richard David Kinder, tied the victim and her companion together with a length of rope, and after being tied together, the defendant Kinder retrieved the purse belonging to the victim and removed from said purse two twenty dollar bills which had previously been given to the victim by her father prior to her leaving her home. "After a brief conversation between the defendant, David Duren, and Richard David Kinder, the defendant Kinder turned the victim and her companion in a position where the victim, Kathy Bedsole, 371 was facing away from the defendant David Duren. At this time the defendant Duren raised the pistol which he had had in his possession and fired one shot, which appeared to strike the victim Bedsole. On firing the shot, the victim Bedsole fell with her companion, Charles Leonard, landing on top of her, as they were still tied together. At this time defendant David Duren aimed the pistol at Charles Leonard and fired approximately four times with three of the shots hitting the witness Charles Leonard in the chest and the legs. After defendant David Duren quit shooting, he and codefendant Richard Kinder left in the victim Charles Leonard's car. "Shortly thereafter, the witness Charles Leonard was able to free himself from the rope binding him with the victim Kathy Bedsole, and he walked to a location where he was able to gain assistance and call the sheriff's office for further assistance. When interviewed by the sheriff's deputy answering the call and after ascertaining from witness Leonard as to what had transpired, a radio transmission was then sent and subsequently received by another deputy sheriff who later observed defendants Duren and Kinder walking along a public roadway in the Roebuck/Huffman area. On questioning the individuals and observing their appearance, they were later taken into custody, and on subsequent questioning by Detective Sgt. M.E. White, made a statement admitting their participation in this crime. "Further testimony by Dr. Robert Brissie established the cause of death of the victim, Kathy Bedsole, as being the result of a small caliber distant gunshot wound to the back of the brain." Duren v. State, 507 So.2d at 113-14. During the trial of the case, Duren's sole "defense" was that he had meant to kill Charles Leonard instead of Kathleen Bedsole. Because Alabama recognizes the theory of transferred intent, that was not a defense. Duren was found guilty of a capital offense involving the robbery and intentional murder of Kathleen Bedsole, Ala. Code 1975, § 13A-5-40(a)(2), and was sentenced to death. Duren contends that he was denied effective assistance of counsel during his trial and during his sentencing hearing. Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984), sets out the standard of proof required in an ineffective assistance of counsel claim. In that case, the United States Supreme Court states: "A convicted defendant's claim that counsel's assistance was so defective as to require reversal of a conviction or death sentence has two components. First, the defendant must show that counsel's performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as the `counsel' guaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel's errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable. Unless a defendant makes both showings, it cannot be said that the conviction or death sentence resulted from a breakdown in the adversary process that renders the result unreliable." Strickland, 466 U.S. at 687, 104 S.Ct. at 2064. In Ex parte Womack, 541 So. 2d 47 (Ala. 1988), this Court discussed the applicability of Strickland to ineffective assistance of counsel claims in Alabama. That case stated: "The first prong of the Strickland test is that `the defendant must show that counsel's representation fell below an objective standard of reasonableness.' 466 U.S. at 688, 104 S.Ct. at 2064. The court explained that this prong of the test does not impose specific guidelines but rather implies fulfillment of the basic duties of the attorney, to assist the client and to be a loyal advocate of the client's position. Likewise, the Supreme Court explained that an attorney has a duty to `bring to bear such skill and knowledge 372 as will render the trial a reliable adversarial testing process.' 466 U.S. at 688, 104 S.Ct. at 2065, citing Powell v. Alabama, 287 U.S. [45] at 68, 53 S.Ct. [55] at 63 [77 L. Ed. 158 (1932) ]. `Moreover, the purpose of the effective assistance guarantee of the Sixth Amendment is not to improve the quality of legal representation, although that is a goal of considerable importance to the legal system. The purpose is simply to ensure that criminal defendants receive a fair trial.' 466 U.S. at 689, 104 S.Ct. at 2065. "The Court went on to explain that judicial scrutiny of counsel's performance must be highly deferential, avoiding the lure of 20/20 hindsight, and must adopt counsel's perspective at the time of trial. `[A] court must indulge a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance.' 466 U.S. at 689, 104 S.Ct. at 2065. Because of the diverse methodologies employed by defense counsel and the broad range of opinion about how to best address a particular situation, the burden is upon the defendant to overcome the presumption that the challenged action constitutes `sound trial strategy.' Michel v. Louisiana, 350 U.S. 91, 101, 76 S. Ct. 158, 164, 100 L. Ed. 83 (1955). The court must determine whether, "`in light of all the circumstances, the identified acts or omissions were outside the wide range of professionally competent assistance. In making that determination, the court should keep in mind that counsel's function, as elaborated in prevailing professional norms, is to make the adversarial testing process work in that particular case. At the same time, the court should recognize that counsel is strongly presumed to have rendered adequate assistance and made all significant decisions in the exercise of reasonable professional judgment.' "Strickland, 466 U.S. at 690, 104 S.Ct. at 2066. "The second prong of the Strickland analysis requires a showing that counsel's deficiencies resulted in prejudice to the defense. The Court explained that the burden is to show actual prejudice and not merely that particular errors or omissions were unreasonable. "`....' "... The question is whether `there is a reasonable probability that, but for counsel's unprofessional error, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.' [466 U.S. at 694, 104 S.Ct. at 2068.] Such a consideration necessarily assumes that the decision maker is reasonable and impartial and conscientiously applies the proper standard, the Court noted." Ex parte Womack, 541 So.2d at 66-67. INEFFECTIVE ASSISTANCE OF COUNSEL AT TRIAL Duren contends that he was denied effective assistance of counsel during his trial because Roger Appell, his attorney, presented a legally invalid defense rather than a legally valid defense based on intoxication. Duren contends that Appell violated Disciplinary Rule 7-102, Code of Professional Responsibility of the Alabama State Bar (rescinded effective January 1, 1991, when the Rules of Professional Conduct became effective), which read: "(A) In his representation of a client, a lawyer shall not: ".... "(2) Knowingly advance a claim or defense that is unwarranted under existing law, except that he may advance such claim or defense if it can be supported by good faith argument for an extension, modification, or reversal of existing law." In Strickland, the United States Supreme Court stated: "Prevailing norms of practice as reflected in American Bar Association standards and the like ... are guides to determining what is reasonable, but they are only guides. No particular set of detailed rules for counsel's conduct can 373 satisfactorily take account of the variety of circumstances faced by defense counsel or the range of legitimate decisions regarding how best to represent a criminal defendant. Any such set of rules would interfere with the constitutionally protected independence of counsel and restrict the wide latitude counsel must have in making tactical decisions. See United States v. Decoster, 199 U.S.App. D.C. [359], at 371, 624 F.2d [196], at 208 [(1976)]." Strickland, 466 U.S. at 688-89, 104 S.Ct. at 2065. Appell testified at the Rule 20 hearing that, after considering the prosecution's strong case against Duren, which included the facts that there was an eyewitness identification of Duren as the one who had committed the murder and that Duren had confessed to the murder on two separate occasions, he felt that he did not have a legally valid defense available. Appell further testified that he had hoped to persuade the jury that Duren did not have the specific intent to kill Kathleen Bedsole and therefore was guilty of murder rather than capital murder. Appell testified that if the jury, despite instructions from the judge on the invalidity of transferred intent as a defense, had believed him about Duren's actual intent and returned a verdict of guilty of murder rather than guilty of capital murder, it would have been in the best interest of his client to present the case in that light.[1] The trial court made the following findings in regard to this issue: "When he made this argument, Appell knew that, due to the doctrine of transferred intent, this was not a legally valid defense. Appell presented this defense for several reasons. First, it had been raised by Duren in his confession. Second, after investigation, Appell knew that the prosecution's case was overwhelming and Duren's chances of acquittal or conviction of a lesser included offense were extremely small. Third, Appell knew that, even if this position was not a valid legal defense, a verdict based on this defense would still benefit Duren. "Appell's decision was not unreasonable. The prosecution's case was overwhelming. Appell had rejected intoxication as a defense because he thought Duren's claim was not credible and that such a defense would only prejudice a jury against his client." We agree with the trial court that Appell's decision was not unreasonable under all the attendance circumstances; consequently, we agree that Duren has not shown that counsel was ineffective in this regard. He was trying to make the most of a bad situation for his client. In Strickland, the United States Supreme Court held: "The reasonableness of counsel's actions may be determined or substantially influenced by the defendant's own statements or actions. ... And when a defendant has given counsel reason to believe that pursuing certain investigations would be fruitless or even harmful, counsel's failure to pursue those investigations may not later be challenged as unreasonable." Strickland, 466 U.S. at 691, 104 S.Ct. at 2066. Appell testified at the Rule 20 hearing that Duren had told him that he had taken the drug LSD on the day of the murder, but Appell also testified that Duren did not appear to believable on this point. Appell further testified that he wanted to present Duren as very believable and remorseful for what had happened. Above all, Appell testified, he wanted the jury to feel sympathy 374 toward Duren. Appell testified that he did not think that informing the jury that Duren may have been intoxicated on the day of the murder would be beneficial in his strategy to have the jury feel sympathy toward Duren. We cannot say that Appell was unreasonable in choosing to handle Duren's trial in the way he did. We certainly cannot say that there is a reasonable probability that the result of the trial would have been different had Appell presented a defense other than the one he chose to present. Therefore, we hold that Duren did not receive ineffective assistance of counsel at his trial. INEFFECTIVE ASSISTANCE OF COUNSEL AT THE SENTENCING HEARING Duren also contends that Appell rendered ineffective assistance of counsel during his sentencing hearing. Duren asserts that Appell should have presented evidence of intoxication, substance abuse, and mental disorders as mitigating factors to be considered during his sentencing. In Strickland, the United States Supreme Court held: "A capital sentencing proceeding like the one involved in this case ... is sufficiently like a trial in its adversarial format and in the existence of standards for decision ... that counsel's role in the proceeding is comparable to counsel's at trialto ensure that the adversarial testing process works to produce a just result under the standards governing decision. For purposes of describing counsel's duties, therefore, Florida's capital sentencing proceeding need not be distinguished from an ordinary trial." Strickland, 466 U.S. at 686-87, 104 S.Ct. at 2064. Therefore, we must consider Appell's conduct at the sentencing hearing in the same manner as we would consider it at trial. In other words, we must determine whether Duren has shown that the results of the sentencing hearing probably would have been different if Appell had presented evidence of Duren's drug, alcohol, and psychological problems as mitigating factors. Appell testified at the Rule 20 hearing that he had talked with Duren and Duren's family many times in trying to determine what was the best approach to take at both Duren's trial and his sentencing hearing. Appell testified that he decided that a "mercy" approach would be the best way to present Duren to the jury. Using this approach, Appell prepared Duren to testify that he knew that what he had done was wrong and that he was very sorry for what had happened. In addition, Appell prepared Duren's aunt to testify concerning Duren's traumatic childhood. In taking this approach, Appell testified that he hoped that the jury would show mercy to Duren and sentence him to life without parole rather than sentence him to death. Appell further testified that he felt that if he introduced into evidence the testimony of a psychologist that had examined Duren, all hope would be lost. Appell testified about the psychologist's report and how he thought it would affect Duren's trial and sentencing hearing: "He [the psychologist] told me that David was a walking time bomb. He told me that in his opinion David was ready to explode, and if it hadn't been Kathy Bedsole it was going to be somebody else. That he was capable of killing again. And that is basically what I remember. And at that point I didn't believe that he fell within the definition of insanity for the guilt or punishment stage, and I was afraid that if Dr. Bair testified to that or if that was asked during the sentencing phase that there would be no hope. And at that point I had no more funds to try to seek another" Appell was also aware of the fact that he had no way of proving that Duren was intoxicated other than Duren's statement that he had taken LSD on the day of the murder. As previously stated, Appell felt that that statement was not believable. Under the Strickland test, a defendant has the burden of proving that, but for the ineffectiveness of his counsel, the outcome of his sentencing hearing probably would 375 have been different. Duren has failed to meet that burden. AFFIRMED. HORNSBY, C.J., and SHORES, ADAMS, HOUSTON, STEAGALL and INGRAM, JJ., concur. ON APPLICATIONS FOR REHEARING MADDOX, Justice. Duren has filed an application for rehearing in this case; he states that he has made a strong showing that his trial counsel was ineffective and that he was prejudiced as a result. The State has also filed an application for rehearing; it asks us to modify our original opinion to hold that issues other than those issues purportedly raised by Duren, but not addressed by him in his brief (the ineffectiveness of counsel issues), were not properly presented to this Court or, in the alternative, to affirm the judgment of the Court of Criminal Appeals on each of the issues addressed by the Court of Criminal Appeals in its opinion. The State seems to be concerned that Duren, in his petition for the writ of certiorari and in his brief, argued only the two issues addressed by this Court in the original opinion, but Duren insists that he raised several other issues by making a reference to those issues in footnote one in his brief: This brief and petition raise only those issues within the core of the subject areas delineated in Rule 39(c) [A.R.App.P.]. However, Duren's effort to comply with the strictures of the Rule does not constitute waiver of other arguments raise[d] in the Rule 20 [A.R.Crim.P.Temp.] petition and on appeal. Indeed, to the fullest extent permissible under Rule 39(c), liberally construed, Duren will ask that any Supreme Court review encompass the full range of arguments submitted to and addressed by the Court of Criminal Appeals. On his application for rehearing, Duren does indeed claim that there were other meritorious issues raised in his petition and addressed by the Court of Criminal Appeals that he wants us to address. Again, however, he devotes only one paragraph of his rehearing brief to call our attention to those issues: "Mr. Duren raised a number of meritorious issues in this Court. He directs this Court's attention to his appeal briefs and the record on appeal, and urges this Court to reconsider its judgment upholding his conviction and sentence of death. Mr. Duren incorporates by reference his prior pleadings in invoking this Court's review and reconsideration of all issues raised and all issues constituting plain error." Regarding the other issues alluded to by Duren, we note that the trial judge made findings of fact relating to these issues and that the Court of Criminal Appeals adopted those findings by the trial court. We find no error in those findings. We have carefully considered Duren's application for rehearing and also the State's application for rehearing, and we are of the opinion that each is due to be denied. APPLICATIONS FOR REHEARING OVERRULED; OPINION EXTENDED. SHORES, ADAMS, HOUSTON, STEAGALL and INGRAM, JJ., concur. NOTES [1] Appell testified as follows: "A. I don't remember if that is the way I phrased it. But basically I was trying to convince the jury that it was a murder case, not a capital murder, there was no intent to kill the young woman that died. "Q. As part of that it was your strategy to try to convince the jury that it was his intent to kill another victim, is that right? "A. Well, I didn't know whethersort of, I guess that is right, but basically my intent was to convince the jury that he had no intent to kill the specific person that was killed, and therefore it wasn't a capital murder case, it was a murder case."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1100841/	507 So. 2d 111 (1986) David Ray DUREN v. STATE. 6 Div. 619. Court of Criminal Appeals of Alabama. February 25, 1986. On Return to Remand October 14, 1986. Rehearing Denied November 12, 1986. 112 Roger C. Appell, Birmingham, for appellant. Charles A. Graddick, Atty. Gen., and William D. Little, Asst. Atty. Gen., for appellee. BOWEN, Presiding Judge. David Ray Duren was convicted for the capital offense involving the robbery and intentional murder of Kathleen Bedsole in violation of Alabama Code 1975, § 13A-5-40(a)(2), and sentenced to death. Three issues are raised on this appeal of that conviction and sentence. I At the jury sentencing-phase of the defendant's trial, the trial judge instructed the jury that, "The only [aggravating] circumstances that I'm going to charge you on are what you heard at the trial as to the component portions of the offense itself and as to kidnapping. * * Aggravating circumstances shall be the following: The capital offense was committed while the defendant was engaged or was an accomplice in the commission of or an attempt to commit or flight after committing or attempting to commit robbery or kidnapping." These were the only aggravating circumstances on which the jury was instructed. The defendant argues that these instructions violated his right to due process of law because the jury was never given a legal definition of kidnapping. The aggravating circumstance upon which the jury was instructed is found in § 13A-5-49(4): "The capital offense was committed while the defendant was engaged or was an accomplice in the commission of, or an attempt to commit, or flight after committing, or attempting to commit, rape, robbery, burglary or kidnapping." Alabama Code 1975, § 13A-5-49(4). The undisputed evidence in this case, including the facts admitted by the defendant, show that the capital offense was committed while the defendant was engaged in the commission of a robbery and a kidnapping. This case is unique in that the defendant admitted that the State's evidence was undisputed except on the issue of whether or not the defendant intended to shoot Miss Bedsole. In his opening remarks, defense counsel stated, "Basically, the evidence is going to be, if not identical to what Mr. McDonald [Assistant District Attorney] said, it's going to be substantially the same. We expect the evidence will not sway very much from what Mr. McDonald said it was going to be [in his opening comments to the jury]." Defense counsel then argued that the defendant should be 113 convicted and punished for murder but not for capital murder. In his closing argument, defense counsel stated, "The evidence is exactly undisputed. It comes out exactly the way Mr. McDonald said, but there is one point of dispute." That "point of dispute" was whether or not Miss Bedsole was facing the defendant at the time he shot her. Counsel stated, "And in fact everything that he [Leonard, the State's only eyewitness] said is exactly the way David [defendant] said it happened. There is no dispute. There is no difference except for that one point." In complying with Alabama Code 1975, § 13A-5-47(d), the trial court entered written findings of fact summarizing the crime and the defendant's participation in it. On appeal, the defendant adopts those findings as his own and states, "There was never any dispute as to the facts of this case." Appellant's brief, p. 3. Those findings are: "Findings of Fact from the Trial. This Court makes the following findings of fact from the trial based on the transcript of the testimony provided to this Court for review prior to the sentencing hearing: "The victim in this case, Kathleen Bedsole, and her companion, Charles Leonard, were on a date on October 20th, 1983 and had left the victim's home at approximately 9:00 p.m. with the intention of going to visit some haunted houses sponsored by radio stations in the Birmingham area, as this was in the Halloween season. "Sometime after leaving the victim's home, the couple had parked at a location in the Huffman area and, according to testimony of witness Charles Leonard, had been there some five to ten minutes prior to two individuals coming up to the car. One of the individuals was armed with a pistol and was identified by witness Leonard as being the defendant, David Ray Duren. The two individuals instructed the victim and her companion, Charles Leonard, to get out of the car and, further, that, if they did as they were instructed, they would be okay. "The victim, Kathleen Bedsole, and her companion, Charles Leonard, were subsequently placed in the trunk of the automobile, and the car drove from that location. The witness Leonard testified that on being placed in the trunk that the car traveled for a short distance and stopped. He heard one of the car doors open and, after a short time span, close, and the car proceeded on. After traveling a short distance, the car appeared to get on an interstate highway and traveled for some length of time. On exiting the interstate, the car shortly thereafter entered what appeared to be a drive-in restaurant, and a conversation was overheard between one of the two defendants and an employee of the restaurant. Only a few words were heard, but one of them appeared to be an exclamation shouted by one of the restaurant employees of the word, `robbery.' Immediately thereafter, the car sped away from the location. "The car again drove for some distance and appeared to get back on an interstate and drove to a location in the eastern section of Jefferson County known as Trussville. The car drove to a secluded location wherein the victim, Kathy Bedsole, and her companion, Charles Leonard, were taken from the trunk of the car. The second defendant, later identified as Richard David Kinder, tied the victim and her companion together with a length of rope, and after being tied together, the defendant Kinder retrieved the purse belonging to the victim and removed from said purse two twenty dollar bills which had previously been given to the victim by her father prior to her leaving her home. "After a brief conversation between the defendant, David Duren, and Richard David Kinder, the defendant Kinder turned the victim and her companion in a position where the victim, Kathy Bedsole, was facing away from the defendant David Duren. At this time the defendant Duren raised the pistol which he had had in his possession and fired one shot, which appeared to strike the victim Bedsole. On firing the shot, the victim 114 Bedsole fell with her companion, Charles Leonard, landing on top of her, as they were still tied together. At this time defendant David Duren aimed the pistol at Charles Leonard and fired approximately four times with three of the shots hitting the witness Charles Leonard in the chest and the legs. After defendant David Duren quit shooting, he and codefendant Richard Kinder left in the victim Charles Leonard's car. "Shortly thereafter, the witness Charles Leonard was able to free himself from the rope binding him with the victim Kathy Bedsole, and he walked to a location where he was able to gain assistance and call the sheriff's office for further assistance. When interviewed by the sheriff's deputy answering the call and after ascertaining from witness Leonard as to what had transpired, a radio transmission was then sent and subsequently received by another deputy sheriff who later observed defendants Duren and Kinder walking along a public roadway in the Roebuck/Huffman area. On questioning the individuals and observing their appearance, they were later taken into custody, and on subsequent questioning by Detective Sgt. M.E. White, made a statement admitting their participation in this crime. "Further testimony by Dr. Robert Brissie established the cause of death of the victim, Kathy Bedsole, as being the result of a small caliber distant gunshot wound to the back of the head with penetration of the brain." The undisputed facts show that the capital offense was committed during the commission of a robbery and a kidnapping. The trial judge's charge on aggravating circumstances was incorrect to the extent that it charged the jury that the only aggravating circumstances they could consider were that the capital offense was committed while the defendant was engaged in the commission of a robbery or kidnapping. However, the defendant was in no way prejudiced by the fact that the trial judge charged the aggravating circumstances in the alternative rather than the conjunctive. The aggravating circumstance that the capital offense was committed during a robbery, § 13A-5-49(4), corresponds to the aggravation alleged in the indictment of murder during a robbery, § 13A-5-40(a)(2). Beck v. State, 396 So. 2d 645, 663 (Ala. 1980). In this case, the trial judge could have directed the jury to find the presence of that aggravating circumstance. "The aggravating circumstance relied upon by the prosecution may be the one corresponding to the aggravating component in the indictment. If so, the instruction may be directory in form. Thus, depending upon the facts of the case, a jury may be told either to search the evidence for one or more aggravating circumstances, or they may be told that their verdict of guilty established the presence of an aggravating circumstance. See Ex parte Kyzer, 399 So. 2d 330, 335 (Ala.1981); Ala. Code § 13A-5-50 (Supp.1981)." J. Colquitt, The Death Penalty Laws of Alabama, 33 Ala.L. Rev. 213, 323, n. 743 (1982). See also E. Carnes, Alabama's 1981 Capital Punishment Statute, 42 Ala.Law. 456, 482-83 (1981). The undisputed facts of this case show that the defendant abducted the two victims and killed one of them. His actions show that beyond any doubt he is at the very least guilty of kidnapping in the second degree. Alabama Code 1975, § 13A-6-44. Since the trial court instructed the jury that they could consider either one aggravating circumstance or the other, since the jury's verdict that the defendant was guilty of the capital offense meant that the State had already established the presence of one of those aggravating circumstances, and since the undisputed evidence proved the existence of both aggravating circumstances, the judge's failure to instruct the jury on the legal elements of kidnapping was only harmless error. In our finding of harmless error is implicit the principle that the trial court should have properly instructed the jury on the elements of kidnapping. "After hearing the evidence and the arguments of both parties at the sentence hearing, the jury 115 shall be instructed on its function and on the relevant law by the trial judge." Alabama Code 1975, § 13A-5-46(d). In instructing a jury that it may consider the aggravating circumstance or circumstances defined in § 13A-5-49(4), the trial court should also give the jury the statutory definition of the underlying felony or felonies involved (rape, robbery, burglary, or kidnapping). The jury instructions given at the end of the sentence hearing should include, among other things, "[e]xplanations of the aggravating circumstances relied upon by the prosecution." Colquitt, 33 Ala.L.Rev. at 322-23. On December 6, 1982, the Supreme Court of Alabama issued an order "recommending" the use of the pattern jury instructions for the trial and sentencing aspect of cases tried under Alabama's 1981 death penalty act (§ 13A-5-40 et seq.) which were prepared by the Alabama Bar Institute for Continuing Legal Education. In a footnote to the aggravating circumstance defined by § 13A-5-49(4) and here under consideration, the proposed instructions state: "In the fourth aggravating circumstance, only the felony relevant to the facts should be read to the jury. If the jury was not instructed on the elements of that felony during the guilt stage, it should be done at this time." Proposed Pattern Jury Instructions for Use in the Guilt Stage of Capital Cases Tried Under Act No. 81-178, 84, n. 4 (1982). II Under the circumstances of this case, no error occurred when one judge presided over the defendant's trial and jury-sentencing hearing and another judge sentenced the defendant to death. Alabama's 1981 Death Penalty Act provides for separate sentence hearings before the jury and the judge. Alabama Code 1975, §§ 13A-5-46 and -47. Circuit Judge Joseph J. Jasper presided over the defendant's trial and sentence hearing before the jury. After the jury had found the defendant guilty and recommended a sentence of death but before the sentence hearing before the judge had been held, Judge Jasper inadvertently discovered that he was distantly related by marriage to the defendant. Judge Jasper also disclosed to all the parties that the defendant's grandfather had attempted to contact him about the defendant after the jury's verdict and recommendation of death. The judge recused himself upon the request of defense counsel and assigned the case to Circuit Judge James S. Garrett. Judge Garrett held the sentencing hearing without a jury and sentenced the defendant to death. A more detailed statement of the events is found in Judge Garrett's written order in sentencing the defendant to death in compliance with Alabama Code 1975, § 13A-5-47(d): "The trial judge in this case, Judge Joseph Jasper, while attending a Circuit Judges Seminar at the Alabama Judicial College in Tuscaloosa during a period of April 24th, 25th and 26th of 1984 learned through a telephone conversation with his deceased wife's mother that the defendant in this case, David Ray Duren, was distantly related to his deceased wife and that she was a fifth cousin to the defendant in this case, and further that the Judge's children would be sixth cousins to the defendant. "This was the first occasion that any degree of relationship was made known to the trial judge in this case, and on being made aware of said relationship, on April 30th, the Court called this matter to the attention of the attorneys for the State, the attorneys for the defendant, and is made a part of the court record or the transcript in this case. The trial judge, Judge Jasper, further communicated with the Judicial Inquiry Commission, asking for an advisory opinion as to his ability to preside further over the matters in this case. The Judicial Inquiry Commission in its response to Judge Jasper's letter restated Canon 3C of the Alabama Canons of Judicial Ethics, advising him that disqualification is not required for relationships more distant than the fourth degree. The Judicial Inquiry Commission through the Hon. Kenneth F. Ingram, Chairman, advised 116 Judge Jasper that in the Commission's opinion that he was not disqualified from sitting in the sentencing portion of the proceedings. "Subsequent to that hearing on to-wit June 15th, 1984, a further hearing was held on a motion to recuse, filed by attorney for the defendant, Hon. Roger Appell, which said hearing is a part of the trial transcript in this case. After due consideration of the motion for recusal, Hon. Judge Jasper did recuse himself from further matters in this case and has referred the case to this Court to conduct the sentencing hearing and all matters concerning this case from that point forward." Before assigning the defendant's case to Judge Garrett, Judge Jasper sought and received assurances from both defense counsel and the defendant that there were no objections to that assignment. After Judge Jasper had recused himself and appointed Judge Garrett, the defendant filed a "motion for a new trial or in the alternative for a new jury sentencing hearing." The defendant argues that Judge Garrett should not have been allowed to impose sentence since he did not have the opportunity to observe the character and demeanor of the witnesses who testified at trial and at the jury-sentencing hearing. Before the sentencing hearing, Judge Garrett reviewed the transcript of the testimony and proceedings at trial and at the jury-sentencing hearing. He informed both sides that they would have the opportunity to present witnesses at the sentencing hearing. On one occasion, Judge Garrett stated, "I would expect witnesses would be called by either or both sides which the Court would see because all of that was done before at the trial, and certainly nothing would preclude that from being done at a sentencing hearing before the Court." At the jury-sentencing hearing, the State relied on the testimony presented at trial and did not present any evidence. The defense called the following witnesses: (1) Shelley Davis, (2) Mary Joe Detlefsen, (3) James Duren, (4) Raymond H. Duren, (5) Shelby Duren, (6) Terri Sullivan, and (7) the defendant. At the sentence hearing held before Judge Garrett, five of those same witnesses, including the defendant, testified. The testimony of Shelley Davis and Terri Sullivan, who did not testify, was cumulative to that of those witnesses who did. In Hill v. State, 455 So. 2d 930, 935, affirmed, 455 So. 2d 938 (Ala.), cert. denied, 469 U.S. 1098, 105 S. Ct. 607, 83 L. Ed. 2d 716 (1984), this Court held that, where the trial judge died, a different judge could sentence the defendant in a capital case after holding another sentencing hearing and after reviewing the records and transcripts of the prior proceeding. "This is in accord with the general rule that it is not error for a judge other than the one who tried the accused to pronounce judgment and sentence. Annot., 83 A.L.R. 2d 1032 (1962)." Hill, supra. See also Berard v. State, 402 So. 2d 1044, 1051 (Ala.Cr.App.1980). Under both the 1981 Death Penalty Act, under which the defendant was convicted and sentenced, and the 1975 death penalty statute involved in Hill and Berard, the jury's "sentence" of death was advisory only. See Baldwin v. Alabama, 472 U.S. 372, 105 S. Ct. 2727, 86 L. Ed. 2d 300 (1985). The distinctions between those two acts would not warrant the invalidation of the substitution of judges which occurred in this case nor would those distinctions justify a result different from that reached in Hill and Berard. The defendant grounds his objection on the fact that Judge Garrett did not hear the defendant's trial testimony, did not observe and feel the emotion of the testimony and was therefore not able to determine the defendant's "extreme remorse over his acts." Appellant's brief, p. 11. "[T]he principal pragmatic objection to the substitution of judges seems to be that where a new judge assumes the bench after testimony has been adduced, although there is available to him the stenographer's report of prior evidence, he is denied the opportunity to observe in person the deportment and demeanor of testifying witnesses on the stand, which factors are of considerable importance in weighing the evidence, and 117 by reason of being elusive in nature cannot be incorporated into the record, so it is argued, in such a manner that they may be given their due and proper consideration in rendering unto the accused a fair and impartial trial." 83 A.L.R.2d at 1033. This argument is not persuasive in this case because here Judge Garrett did hear and observe the defendant and his witnesses testify. The defendant was given every opportunity to present the witnesses he desired. "While ... [the defendant's] alleged remorse and apparent cooperation possibly could have been considered as non-statutory mitigating circumstances, pursuant to Code 1975, § 13A-5-52, whether to consider them as such was within the discretion of the trial judge. Cochran v. State, 500 So. 2d 1161 (Ala.Cr.App.1984), cert. granted (Ala., July 24, 1984)." Ex parte Harrell, 470 So. 2d 1309, 1318 (Ala.), cert. denied, ___ U.S. ___, 106 S. Ct. 269, 88 L. Ed. 2d 276 (1985). Finally, we note, again, that the evidence in this case was not disputed and was, in fact, for the most part, admitted by the defendant. See Issue I. For these reasons and under the circumstances of this case, we find no error in the substitution of judges. III The defendant argues that the denial of his request for the State to provide him reasonable funds to employ experts denied him due process of law. The defendant is indigent and was represented at trial by appointed counsel. Prior to trial, by written motion, he requested the aid of (1) a criminal investigator "to investigate the facts and witnesses surrounding the alleged crime"; (2) a "polling expert ... to conduct a scientific survey of public opinion in Jefferson County regarding the public's knowledge of the case and their belief or disbelief in the Defendant's guilt" and to aid in the presentation of a motion for change of venue and a motion for individual questioning of jurors; (3) a "jury selection expert", a "juristic psychologist" to aid in the voir dire and selection of the jury; (4) an "expert on death qualified juries"; (5) a psychologist and a psychiatrist "to ascertain the existence of any mitigating circumstances relating to defendant's mental state or capacity"; and (6) a "presentence investigation expert" to conduct a presentence investigation. The defendant's estimated cost of these services totaled $6,750. The determination of this issue is governed by Ake v. Oklahoma, 470 U.S. 68, 105 S. Ct. 1087, 1097, 84 L. Ed. 2d 53 (1985), which held "that when a defendant demonstrates to the trial judge that his sanity at the time of the offense is to be a significant factor at trial, the State must, at a minimum, assure the defendant access to a competent psychiatrist who will conduct an appropriate examination and assist in evaluation, preparation, and presentation of the defense." In Caldwell v. Mississippi, 472 U.S. 320, 105 S. Ct. 2633, 2637, n. 1, 86 L. Ed. 2d 231 (1985), the United States Supreme Court found "no need to determine as a matter of federal constitutional law what if any showing would have entitled a defendant to assistance of the type here sought [a criminal investigator, a fingerprint expert, and a ballistics expert]" given that "petitioner offered little more than undeveloped assertions that the requested assistance would be beneficial." In Ex parte Grayson, 479 So. 2d 76, 79 (Ala.), cert. denied, ___ U.S. ___, 106 S. Ct. 189, 88 L. Ed. 2d 157 (1985). Our Supreme Court held that a denial of funds to pay defense experts does not amount to a deprivation of constitutional rights. In an opinion issued eleven days before Ake was decided, the Alabama Supreme Court held: "The legislature decided in Code of 1975, § 15-2-21(d), that, up to a maximum limit of $500, the State will reimburse the reasonable expenses incurred in defending an indigent defendant on approval in advance by the trial court. Petitioner alleges that this amount did not allow him to procure the expert witnesses that were needed for his defense and, therefore, deprived him of his constitutional right to effective counsel. In Thigpen v. State, 372 So. 2d 385 (Ala.Crim.App.), cert. denied, 372 So. 2d 387 (Ala. 1979), 118 cert. denied, 444 U.S. 1026, 100 S. Ct. 690, 62 L. Ed. 2d 660 (1980), the Court of Criminal Appeals held that `a denial of funds to pay defense experts ... does not amount to a deprivation of constitutional rights.' The provision for funds for expert witnesses is within the discretion of the legislature, not the courts. However, the Court of Criminal Appeals recognized in the present case that `constitutional guarantees may require a state to provide an indigent criminal with expert assistance.' "The only time a defendant, whether indigent or not, has the right to have an independent expert examine physical evidence is when such evidence is (1) `critical' and (2) subject to varying expert opinions. Barnard v. Henderson, 514 F.2d 744 (5th Cir.1975). To be `critical,' the evidence must be the only evidence linking the accused with the crime or proving an element of the corpus delicti. Hoback v. Alabama, 607 F.2d 680 (5th Cir.1979). Even if the evidence is indeed `critical,' it is not subject to independent examination unless it is also subject to varying expert opinion. White v. Maggio, 556 F.2d 1352, 1358 (5th Cir.1977). This is the law of this state. Gwin v. State, 425 So. 2d 500, 508 (Ala.Crim.App. 1982), cert. quashed, 425 So. 2d 510 (Ala. 1983).... "In this case, we agree with the Court of Criminal Appeals that the State was not constitutionally required to provide this indigent with the services of expert witnesses. See Hoback, supra. The trial judge did grant Grayson's request for funds up to the $500 limit. The defense chose to expend them on a public opinion survey of the county for purposes of challenging venue. That decision was one for defense counsel to make. But it is not constitutionally required that the State give reimbursement for every expense which defense counsel believes is needed. The legislature has decided that $500 is a reasonable amount. We do not find that this limit contravenes the defendant's Sixth Amendment rights." On application for rehearing our Supreme Court addressed Ake: "Petitioner calls our attention to a recent decision of the United States Supreme Court, Ake v. Oklahoma, 470 U.S. 68, 105 S. Ct. 1087, 84 L. Ed. 2d 53 (1985), which, petitioner argues, required the State of Alabama to provide him with a pathologist of his own choosing to assist him during his preparation for trial and during the trial itself.... "Petitioner interprets Ake as requiring that he have access, provided by the State, to a forensic pathologist who would furnish assistance to petitioner as to the cause of death of the victim, Annie Laurie Orr. "The issue in Ake, supra, was whether or not an apparently insane indigent had the right of access to a psychiatrist to determine his sanity at the time of the alleged offense. In response to that issue, the Supreme Court stated: "`We hold that when a defendant has made a preliminary showing that his sanity at the time of the offense is likely to be a significant factor at trial, the Constitution requires that a State provide access to a psychiatrist's assistance on this issue, if the defendant cannot otherwise afford one.' "Petitioner does not claim that he was deprived of access to a psychiatrist's assistance. He claims, instead, a right to the services of a pathologist. With deference to petitioner's novel contention, there is nothing contained in the Ake decision to suggest that the United States Supreme Court was addressing anything other than psychiatrists and the insanity defense. Certainly, that decision cannot be broadly interpreted to require a State to provide experts of any category of a defendant's own choosing to assist him in preparing whatever defense he chooses. We have been cited to no other authority requiring such appointments." Ex parte Grayson, 479 So.2d at 82. We find that the trial court did not commit error in denying the defendant's motion for funds to employ experts even if the principles of Ake apply to anything other than psychiatrists and the insanity defense. 119 The criminal investigator was properly denied because Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963), requires the prosecutor to disclose evidence favorable to the accused on the issues of guilty or punishment, but "the Court has not gone the full road and expressly required that the State provide to the defendant access to the prosecutor's complete files, or investigators who will assure that the defendant has an opportunity to discover every existing piece of helpful evidence." United States v. Bagley, 473 U.S. 667, 105 S. Ct. 3375, 3390, 87 L. Ed. 2d 481 (1985). Here, the only witnesses to the crime were the defendant himself, the surviving victim Leonard, and co-defendant Kinder. The State's evidence was virtually undisputed and, on the only contested issue, the defendant was the only one who could testify that he did not intend to shoot Miss Bedsole. Under these circumstances, the trial court's refusal to provide the defendant with a criminal investigator at state expense was proper. The denial of funds to employ a "polling expert," "a jury selection expert," and an "expert on death qualified juries" was also proper. In Ex parte Grayson (opinion on original submission), our Supreme Court held: "Did the statutory limit on state-provided funds for expenses prevent defendant from proving actual prejudice in the community at large, and thus cause him to lose his request for change of venue? "`The proper manner for ascertaining whether adverse publicity may have biased the prospective jurors is through the voir dire examination,' Anderson v. State, 362 So. 2d 1296, 1299 (Ala.Crim. App.1978), not through extensive and expensive surveys. It costs nothing to question the prospective jurors; thus the limit on available funds cannot be said to have prevented defendant from showing actual prejudice of the jurors." 479 So.2d at 80. In his motion for change of venue, the defendant alleged that "[T]he pretrial publicity has created an inherently prejudicial atmosphere making the selection of a fair and impartial jury impossible." Prior to trial, defense counsel told the trial judge, "Judge, we have a motion for change of venue, but we have not been able to present sufficient evidence to this court because we don't have the funds to present any testimony on that." As best this Court can determine from the record, the jury venire consisted of fifty-four persons. Twenty-nine of those individuals indicated on voir dire that they had read or heard something about the crime. Each of those twenty-nine people was separately interviewed to determine the nature and effect of the pretrial publicity to which each had been exposed. Of these twenty-nine persons, the defense counsel challenged only one for cause on the basis of pretrial publicity. That particular venireman indicated that he had formed an opinion that the defendant was guilty. That venireman was excused for cause. The remaining twenty-eight venire members stated that they could give the defendant a fair trial based upon the evidence presented at trial. The record contains no newspaper articles about the crime. There was no testimony or evidence presented about the nature of the pretrial publicity. Under these circumstances, the defendant has "offered little more than undeveloped assertions that the requested assistance would be beneficial" and his request was properly denied. Caldwell, 472 U.S. at 323, n. 1, 105 S.Ct. at 2637, n. 1, 86 L. Ed. 2d 231. "[A] State's refusal to provide the defendant psychiatric assistance in presenting mitigating evidence at his sentencing proceeding, where the State presents psychiatric evidence against the defendant, also violates due process." Bowden v. Kemp, 767 F.2d 761, 763 (11th Cir.1985), citing Ake, 470 U.S. at 84, 105 S.Ct. at 1097, 84 L. Ed. 2d 53. Here, as in Bowden, there was "no claim here that he was denied the assistance of a psychiatrist in determining whether to present an insanity defense." Bowden, 767 F.2d at 763. The defendant did not demonstrate to the trial judge that his sanity at the time of the offense was to be a significant factor at 120 trial. Consequently, Ake's "first holding" that speaks to such a claim is inapplicable. Bowden, 767 F.2d at 764. Although the defendant initially entered a plea of not guilty by reason of mental disease or defect, that plea was withdrawn before trial. Prior to trial, the trial court offered "to order the State psychiatrist to examine this defendant." Defense counsel rejected that offer and stated, "No, sir, we don't wish that at this time." Defense counsel testified as a witness on his motion requesting funds to hire experts. He stated that the defendant had been examined and "initially evaluated" by a Dr. Steve Bair while confined in the county jail. At the time counsel was testifying, Dr. Bair had not filed his report as he had just examined the defendant the previous day. The defendant's family had been able to raise the $288 for the initial evaluation but no more. The results of Dr. Bair's evaluation are not revealed nor is there any further mention of Dr. Bair contained in the record. In the sentencing proceedings, both before the jury and the judge, the prosecution presented no new evidence but merely relied upon what had already been presented at trial. At trial, the State presented no expert psychiatric evidence. Here, as in Bowden, "[u]nlike the sentencing situation in Ake, ... [the] prosecutor had no need to present psychiatric evidence to show an aggravating factor and he presented none. The dangers and inequities which concerned the Court in Ake consequently did not exist." Bowden, 767 F.2d at 764, n. 5. Again, the defendant failed to exhibit to the trial judge that his mental condition at the time of the offense was to be a significant factor at his sentencing proceedings. The defendant also requested funds to employ a "presentence investigation expert." With regard to this request, the defendant offered only the "undeveloped assertions that the requested assistance would be beneficial." Caldwell, 472 U.S. at 323, n. 1, 105 S.Ct. at 2637, n. 1, 86 L. Ed. 2d 231. Consequently, he has demonstrated no due process violation in the trial judge's denial of that request. For all of the reasons stated above, we find no error in the trial judge's denial of the defendant's motion to hire experts. IV Although not raised as an issue on appeal, the indictment mistakenly charged the defendant with an offense "in violation of Act No. 81-878 of the 1981 Session of the Alabama Legislature" (emphasis added), instead of Act No. 81-178. See Alabama Code 1975, § 13A-5-39 et seq. "Miscitation of a code section does not void an indictment which otherwise states an offense; and, in the absence of a showing of actual prejudice to the defendant, reference to the erroneous code section will be treated as mere surplusage." Ex parte Bush, 431 So. 2d 563, 564 (Ala.), cert. denied, 464 U.S. 865, 104 S. Ct. 200, 78 L. Ed. 2d 175 (1983). V In reviewing the propriety of the defendant's death sentence, our consideration of the questions required by § 13A-5-53 is severely hampered by the failure of the trial court to "enter specific written findings concerning the existence or nonexistence of each aggravating circumstance enumerated in section 13A-5-49, each mitigating circumstance enumerated in section 13A-5-51, and any additional mitigating circumstances offered pursuant to section 13A-5-52." § 13A-5-47(d). "Without knowing what the trial judge did, we are unable to properly review his sentencing decision." Ex parte Cochran, 500 So. 2d 1179 (Ala.1985). This cause is remanded to Jefferson County Circuit Judge James S. Garrett with directions that he enter specific written findings concerning the existence or nonexistence of the aggravating and mitigating circumstances based upon the evidence presented at trial, the evidence presented during the sentence hearing, and the presentence investigation report and any evidence submitted in connection with it as directed and required by § 13A-5-47(d). *121 Those findings shall be sent to this Court for review. The judgment of the circuit court is remanded with directions. REMANDED WITH DIRECTIONS. All Judges concur. ON RETURN TO REMAND BOWEN, Presiding Judge. On remand, the trial judge fully complied with the directions of this Court and entered specific written findings concerning the existence or nonexistence of the aggravating and mitigating circumstances. Our review convinces us that the defendant was fairly and properly convicted of the capital offense charged and sentenced to death. The judgment and sentence of the circuit court are affirmed. OPINION EXTENDED; AFFIRMED. All Judges concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1535485/	212 B.R. 682 (1997) In re SOUTHEAST BANKING CORPORATION, Debtor. CHEMICAL BANK, as Indenture Trustee Under the Indenture dated as of March 1, 1983, of Southeast Banking Corporation, and Gabriel Capital, L.P., Appellants, v. FIRST TRUST OF NEW YORK, NAT'L ASSOCIATION, as Indenture Trustee, the Bank of New York, as Indenture Trustee, and Southeast Banking Corporation, Debtor, Appellees. No. 95-2045-CIV. United States District Court, S.D. Florida. February 28, 1997. 683 684 Phillip M. Hudson, III, Kelley, Drye & Warren, Miami, FL, Sarah Reid, David C. Cimo, Kelly, Drye & Warren, New York, NY, for Appellant Chemical Bank, as Indenture Trustee. Paul J. McMahon, Schulte, Blum, McMahon, Joblove & Haft, Miami, FL, David M. Friedman, David S. Rosner, Kasowitz, Benson, Torres & Friedman, New York, NY, for Appellant Gabriel Capital, L.P. Francis L. Carter, Janie L. Anderson, Coll Davidson Carter, Miami, FL, Charles R. Hager, Dewey Ballantine, New York, NY, for Indenture Trustees First Trust of New York and Bank of New York. Mark D. Bloom, Greenberg Traurig, Miami, FL, for Southeast Banking Corporation. ORDER AFFIRMING FINAL JUDGMENT OF THE BANKRUPTCY COURT MORENO, District Judge. This Bankruptcy Appeal involves the effect of 11 U.S.C. § 510(a) on the enforcement of subordination agreements in bankruptcy proceedings. After conducting a de novo review, the Court agrees with the Bankruptcy Court that Section 510(a) does not change the standard bankruptcy practice that post-petition interest and post-petition fees and costs will not be subordinated absent explicit language to that effect in the indenture. FACTUAL BACKGROUND A. Southeast's Bankruptcy Or September 20, 1991 (the "Petition Date"), Southeast Banking Corporation ("Southeast" or the "Debtor") filed a voluntary petition for relief under Chapter 7 of title 11 of the United States Code (the "Bankruptcy Code"). On April 14, 1992, William A. Brandt, Jr. was elected as successor Chapter 7 trustee pursuant to Sections 702 and 703 of the Bankruptcy Code. On April 28 1992, the Court confirmed Brandt's election as Chapter 7 trustee. B. The Senior Indentures Appellant Chemical Bank became the Senior Indenture Trustee upon the merger of Manufacturers Hanover Trust Company into Chemical Bank. Chemical Bank is the Senior Indenture Trustee under the following Indenture: Indenture, dated as of March 1, 1983 (the "Senior Indenture"), between Southeast Banking Corporation and Manufacturers Hanover Trust Company, Trustee. Appellant Gabriel Capital together with three of its affiliates, is the beneficial owner of a significant percentage of the outstanding senior debentures. The Senior Indenture provides, inter alia, the continuing obligation to pay principal and interest on the Senior Notes: [Southeast] covenants and agrees for the benefit of the holders of each series of [Senior Notes] that it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the [Senior Notes] of such series at the place or at the respective times and in the manner provided in such [Senior Notes]. The Senior Indenture also provides that in the event of default: [Southeast] will pay to the [Senior] Trustee for the benefit of the Holders of the [Senior Notes] of such series the whole amount that then shall have become due and payable on all [Senior Notes] of such series for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the same rate as the rate of interest . . . specified in the [Senior Notes] of such series); and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the [Senior] Trustee and each predecessor trustee, their respective agents, attorneys and counsel, and all advances made, by the [Senior] Trustee and each predecessor trustee except as a result of its negligence or bad faith. C. The Indenture Trustees Appellee The Bank of New York is the Indenture Trustee under the following two Indentures: 685 (1) Indenture, dated as of October 15, 1972, between Southeast Banking Corporation and Morgan Guaranty Trust Company of New York, Trustee, providing for the issuance of $35,000,000 4 ¾% Convertible Subordinated Debentures Due 1997. (2) Indenture, dated as of March 15, 1989, between Southeast Banking Corporation and Irving Trust Company, Trustee, providing for the issuance of Subordinated Debt Securities. Appellee First Trust of New York, successor in interest to Morgan Guaranty Trust Company of New York, is the Indenture Trustee under the following three Indentures: (1) Indenture dated as of December 1, 1984, between Southeast Banking Corporation and Morgan Guaranty Trust Company of New York, Trustee, providing for the issuance of $75,000,000 Floating Rate Subordinated Notes Due 1996. (2) Indenture, dated as of November 1, 1985, between Southeast Banking Corporation and Morgan Guaranty Trust Company of New York, Trustee, providing for the issuance of $75,000,000 Floating Rate Subordinated Capital Notes Due 1997. (3) Indenture, dated as of April 1, 1987, between Southeast Banking Corporation and Morgan Guaranty Trust Company of New York, Trustee, providing for the issuance of $50,000,000 6 1/2% Convertible Subordinated Capital Notes Due 1999. D. The Unsecured Proofs of Claims The parties below stipulated that all of the claimants filed "proofs of claim as unsecured nonpriority claims, without the attachment of any supporting documents reflecting the assertion of any lien or security interest in the property of the debtor." Therefore, the Bankruptcy Court below found that none of the claimants held security for the repayment of the indebtedness under the indentures. E. The Subordination Provisions Each of the five subordinated indentures contains an agreement to subordinate payments otherwise payable to junior debenture holders.[1] The parties do not dispute, and the Bankruptcy Court found that, although the express language of these subordination provisions may differ slightly from one indenture to another, the legal effect of the minor differences is immaterial to the determination of the issues presented on appeal. Essentially, at issue here are the provisions of the subordination agreements that state that upon the bankruptcy or liquidation of Southeast, distributions otherwise allocable to payment of the Subordinated Debt must be paid over to the Senior Trustee until the Senior Debt has been "paid in full." F. The Decision of the Bankruptcy Court The Appellants commenced this adversary proceeding on September 23, 1994, arguing that the subordination agreements entitle them, as Senior Debenture holders, to payment of post-petition interest, interest on interest, and reimbursement of attorney's fees and costs from distributions otherwise payable to junior debenture holders. All parties subsequently moved for summary judgment. In addition, the Chapter 7 Trustee cross-moved for partial summary judgment concerning the liability of the insolvent estate, seeking a declaration from the Bankruptcy Court that if the Plaintiffs prevailed, the claims against Southeast would not increase as a result of the Bankruptcy Court's ruling. The Bankruptcy Court granted in part and denied in part Appellants' and Appellees' motions for summary judgment and declared as moot the Trustee's motion for partial summary judgment. The Bankruptcy Court granted Appellants pre-petition attorney's 686 fees and costs but rejected Appellants' demand for the payment of post-petition interest, compound interest, and post-petition fees and costs. Appellants now argue that the Bankruptcy Court erred in denying such recovery and request that the ruling of the Bankruptcy Court be reversed with regard to the issues of post-petition interest, compound interest, and post-petition attorney's fees and costs. LEGAL ANALYSIS A. Subordination agreements prior to the enactment of the Bankruptcy Code Prior to the enactment of the Bankruptcy Code and Section 510(a), subordination agreements were enforced through the bankruptcy court's equitable powers. As long as the subordination agreements were lawful outside of the scope of bankruptcy, they would be upheld in a bankruptcy proceeding in order to "prevent junior creditors from receiving funds where they have `explicitly agreed not to accept them.'" Matter of Credit Indus. Corp., 366 F.2d 402, 410 (2d Cir.1966) (citation omitted). However, equitable concerns also led to a judicial limitation being placed on the enforcement of subordination agreements: as a general rule, interest on unsecured senior debt accruing after the filing of the bankruptcy petition would not be subordinated. See Matter of King Resources Co., 528 F.2d 789 (10th Cir.1976); In re Kingsboro Mortgage Corp., 514 F.2d 400 (2d Cir.1975); Matter of Time Sales Fin. Corp., 491 F.2d 841 (3d Cir.1974). It is not hard to discern the concerns underlying this rule. The general rule in bankruptcy is that interest stops accruing against the debtor upon the date of the filing of the petition of bankruptcy. In re Ionosphere Clubs, Inc., 134 B.R. 528, 531 (Bankr. S.D.N.Y.1991) (citing Vanston Bondholders Protective Committee v. Green, 329 U.S. 156, 163, 67 S. Ct. 237, 240, 91 L. Ed. 162 (1946)). Thus, under a subordination agreement, interest on the senior debt that accrues after the petition date must be paid out of the potential distributions to the junior creditor. Owing simply to the protracted nature of bankruptcy proceedings, a junior creditor's share of the recovery could be greatly reduced or eliminated while a senior creditor receives all of the recovery, more recovery in fact than the senior creditor would have been entitled to against the estate. See 4 Collier on Bankruptcy ¶ 510.03[3] (15th ed. revised 1996). This result has traditionally been thought to be unequitable in light of the long-standing bankruptcy principle that a court balance the equity not only between creditors and debtor but also between creditor and creditor, see Vanston Bondholders Protective Committee v. Green, 329 U.S. 156, 165, 67 S. Ct. 237, 240, 91 L. Ed. 162 (1946), and "[c]ourts have uniformly . . . prevent[ed] such a result." 4 Collier supra at ¶ 510.03[3]. Thus, courts, in their equitable power, permitted the recovery of post-petition interest only when it was absolutely clear in the language of the debenture that the parties had contemplated and agreed to such a result. See Kingsboro, 514 F.2d at 401. This approach came to be known as the "rule of explicitness." 4 Collier supra at ¶ 510.03[3] (15th ed. revised 1996); In re Ionosphere Clubs, Inc., 134 B.R. 528 (Bankr. S.D.N.Y.1991). A rule of contract construction, the rule of explicitness places a heavy burden on the senior creditor to prove a clear and unambiguous intent in the debenture to subordinate post-petition interest. B. Section 510(a) of the Bankruptcy Code As the Ionosphere court noted, "[s]ince the enactment of the Bankruptcy Code and Section 510(a), enforcement of subordination provisions is no longer solely an application of the court's equitable powers. It is mandated by statute." Ionosphere, 134 B.R. at 533. Indeed, "whatever equitable powers remain in the bankruptcy courts must and can only be exercised within the confines of the Bankruptcy Code." Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206, 108 S. Ct. 963, 969, 99 L. Ed. 2d 169 (1988). Section 510(a) codifies the pre-Code rule that a subordination agreement is enforceable in a bankruptcy proceeding: "A subordination agreement is enforceable in a case under this title to the same extent that such agreement is enforceable under applicable 687 nonbankruptcy law." 11 U.S.C. § 510(a) (1993). The Appellants argue that Section 510(a) goes even further. In their view, it overrules the rule of explicitness and calls for a "bankruptcy neutral" enforcement of subordination agreements. Put simply, the Appellants interpret the phrase "enforceable to the same extent as under nonbankruptcy law" to mean enforceable as if the debtor had never gone bankrupt. And certainly, if the debtor were solvent, the senior debt holders would be entitled to be paid all principal and all interest to the date of payment before the junior debt holders received any distributions. Thus, the Appellants argue that the plain meaning of Section 510(a) calls for the subordination of post-petition interest and fees and costs even absent explicit language to that effect in the indenture. The Appellants' plain meaning argument has superficial appeal. However, there is simply no support for the view that Section 510(a) works such a radical change in bankruptcy practice. To the contrary, the more plausible reading of Section 510(a) is that it in fact adopts the pre-Code treatment of subordination agreements: Section 510(a) states that a subordination agreement "is enforceable in a case under [title 11] to the extent that such agreement is enforceable under applicable non-bankruptcy law." This statement comports with prior law. The reference to enforceability to the same extent as under applicable non-bankruptcy law imports all non-bankruptcy law defenses to the agreement. 4 Collier supra at ¶ 510.03[2] (emphasis added). In other words, the language upon which the Appellants base their argument simply means that a party to a subordination agreement can, in a bankruptcy proceeding, challenge the subordination agreement on any grounds upon which it could challenge that agreement outside of bankruptcy practice (e.g., for lack of consideration, duress, failure to execute). This makes sense. After all, the rule of explicitness was developed to mitigate against the harsh results of enforcing subordination agreements. A statement making clear that an aggrieved junior creditor could challenge a subordination agreement as he could any other contract is very much in the same spirit. Moreover, Sections 502 and 506 of the Code make clear that in every other context, Congress intended to codify the well-settled bankruptcy practice that an unsecured creditor is not entitled to post-petition interest. Section 502(b)(2) states that a court will determine the amount of a creditor's claim "as of the date of the filing of the petition," and will allow such claim except to the extent that "such claim is for unmatured interest." 11 U.S.C. § 502(b)(2). Furthermore, Section 506 states that only an oversecured creditor can claim post-petition interest against an insolvent bankruptcy estate in connection with its claims. 11 U.S.C. § 506(b). There is simply no evidence that Congress meant to deviate from that rule when it wrote Section 510(a). Certainly such a radical change would have generated some debate in the legislative history. To the contrary, a review of the legislative history of that section reveals no mention of the subject of the subordination of post-petition interest. See House Report No. 95-595, 95th Cong., 1st Sess. 359 (1977); Senate Report No. 95-989, 95th Cong., 2d Sess. 74 (1978). As the Supreme Court has stated: when Congress amends the bankruptcy laws, it does not write `on a clean slate'. . . . This Court has been reluctant to accept arguments that would interpret the Code . . . to effect a major change in pre-Code practice that is not the subject of at least some discussion in the legislative history. Dewsnup v. Timm, 502 U.S. 410, 419, 112 S. Ct. 773, 779, 116 L. Ed. 2d 903 (1992). Indeed, the Bankruptcy Code should be read to overrule past bankruptcy practice only when there is "a clear indication that Congress intended such a departure." Pennsylvania Dep't of Public Welfare v. Davenport, 495 U.S. 552, 563, 110 S. Ct. 2126, 2133, 109 L. Ed. 2d 588 (1990). Contrary to the Appellants' protestations, Section 510(a) offers no such clear indication. The "party contending that legislative action changed settled law has the burden of showing that the legislature intended such a change." Green v. Bock Laundry Machine Co., 490 U.S. 504, 521, 109 688 S.Ct. 1981, 1991, 104 L. Ed. 2d 557 (1989). The Court concludes that the Appellants have failed to meet that burden. To the contrary, what little authority exists on this issue is in accordance with this Court's reading of Section 510(a). First, in Ionosphere, the court concluded that the Kingsboro opinion and the rule of explicitness have survived the enactment of the Bankruptcy Code. Ionosphere, 134 B.R. 528, 534 (Bankr.S.D.N.Y.1991). Appellants contend that the Ionosphere court did not reach the issue of the interpretation of Section 510(a). This Court reads the Ionosphere opinion differently. It is true that the Ionosphere court noted that "one might argue that Kingsboro is inconsistent with Section 510(a)" and declined to enter into extensive discussion of that issue in light of the fact that the parties did not raise it. Id. at 533. However, the Ionosphere court did go on to state that "it is not clear to this Court that [Kingsboro] is inconsistent with Section 510(a)," id. at 534, and must have been sufficiently satisfied that such was not the case in order to conclude that "Kingsboro retains its validity and remains the controlling law in the Second Circuit." Id. Finally, it is worth noting that various post-Code commentaries on bankruptcy and structured finance continue to cite the rule of explicitness as the principle governing the award of post-petition interest. See, e.g., Structured Finance Techniques, 50 Bus. Law. 527, 585 n. 80 (1995) ("Subordination agreements are enforceable in bankruptcy to the extent that they are enforceable under applicable nonbankruptcy law. 11 U.S.C. § 510(a) (1988). The senior creditor also would be entitled to recover post-petition interest prior to any distribution to the junior creditor if the subordination provisions were carefully crafted to define as `senor debt' post-petition interest.") (emphasis added); Robin E. Phelan, Terry W. Conner, Joseph L. Kinsella, Word Wars: Structuring and Documenting Secured Term Loans Under the Bankruptcy Code, 427 PLI/Comm 127, 273-274 (1987) ("[I]t is important that senior creditors include in contractual subordination agreements an express right to receive post-petition interest, before any payments are made to the junior creditors.") (emphasis added); Robert M. Zinman, Under the Spreading Bankruptcy: Subordinations and the Codes, 2 Am. Bankr.Inst. L.Rev. 293, 335 (1994) ("Senior creditors have . . . been generally frustrated in their attempt to obtain post-petition interest (not available for unsecured or undersecured debt) out of the junior creditor's share where the subordination agreement did not provide for subordination to post-petition interest by express provision designed to apprise juniors of this fact.") (emphasis added). If nothing else, these commentaries make clear that even since the enactment of the Bankruptcy Code, parties to loan agreements still operate under the assumption that the rule of explicitness governs the subordination of post-petition interest in bankruptcy proceedings. In short, there is no support for the Appellants' contention that Section 510(a) overrules the rule of explicitness and mandates the subordination of post-petition interest. In fact, all indications, including the more plausible interpretation of Section 510(a), are to the contrary. Mindful of the fact that the burden is on the Appellants to prove that in enacting the Bankruptcy Code Congress intended to change the pre-Code treatment of post-petition interest, the Court concludes that the rule of explicitness survives the enactment Section 510(a) and remains the controlling law. C. The Rule of Explicitness and the Language of the Indentures Applying the rule of explicitness, it is clear from case law that the indentures at issue here provide insufficient notice to the junior creditors of the intent to subordinate post-petition interest. As the Bankruptcy Court below found, "[n]o fewer than three Courts of Appeals and the Bankruptcy Court for the Southern District of New York, applying the Rule of Explicitness, have unanimously rejected the precise claims pursued here by the Plaintiffs in cases involving virtually identical subordination language." In re Southeast Banking Corp., 188 B.R. 452, 465 (Bankr.S.D.Fla.1995) (citing Matter of King Resources Co., 528 F.2d 789 (10th Cir.1976); In re Kingsboro Mortgage Corp., 514 F.2d 400 (2nd Cir.); Matter of Time Sales Fin. 689 Corp., 491 F.2d 841 (3d Cir.1974); In re Ionosphere Clubs, Inc., 134 B.R. 528 (Bankr. S.D.N.Y.1991)). The indentures at issue here make no mention of post-petition interest, despite the fact that they clearly contemplate the possibility of bankruptcy. This omission is particularly telling in light of the fact that the rule of explicitness existed well before at least four of the five indentures were written. Had the parties to the indentures intended the result that the Appellants seek, they could have easily provided for it in the subordination agreements.[2] Their failure to do so necessarily leads this Court to find that the right to post-petition interest is not clearly, explicitly, precisely, and unambiguously provided for in the indentures. D. Post-Petition Attorney's Fees and Costs Having found that Section 510(a) works no major change in the bankruptcy treatment of post-petition interest, it follows that Section 510(a) similarly does not alter the treatment of post-petition attorney's fees and costs. Section 506(b) in conjunction with Section 502 authorizes an award of attorney's fees and costs incurred post-petition only to the extent that the claim is oversecured. 11 U.S.C. §§ 506(b) and 502. For the reasons discussed above, the Appellants have failed to show that Section 510(a) modifies those rules. Thus, the subordination of attorney's fees and costs should be allowed only if there is explicit language in the Indenture to that effect. Section 5.2 of the Senior Indenture provides that the Senior Trustee is entitled to "such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor trustee, their respective agents, attorneys and counsel. . . ." As the Bankruptcy Court below found, this general reference to the collection of fees and costs cannot be deemed an explicit notice to the junior creditors that their interests are subordinated to attorney's fees and costs incurred post-petition in the collection of the senior debt. In re Southeast Banking Corp., 188 B.R. 452, 471 (Bankr. S.D.Fla.1995). Thus, this Court must affirm the Bankruptcy Court's ruling denying the recovery of post-petition attorney's fees and costs. E. Compound Interest Finally, Appellants are not entitled to compound interest under New York law. At the time the indentures were entered into, New York law prohibited contractual provisions to pay compound interest. In re Chateaugay Corp., 170 B.R. 551, 555 (S.D.N.Y.1994). Subsequently, the New York State Legislature enacted Section 5-527 of the New York General Obligations Law which now permits the enforceability of such provisions. See N.Y. Gen. Oblig. Law § 5-527 (McKinney Supp.1992). It is true, as the Appellants assert, that in New York "[w]hen there has been a repeal of a prohibitory statute, which had rendered invalid a contract violative of its provisions, such a repeal will render the contract valid and enforceable." Goldfarb v. Goldfarb, 86 A.D.2d 459, 461, 450 N.Y.S.2d 212, 214 (Sup. Ct.App.Div.1982). However, this is not the case of the repeal of a prohibitory statute. Rather, N.Y. Gen. Oblig. Law § 5-527 overrules a long line of case law. More importantly, in cases involving loan agreements nearly identical to the one at issue here, three separate courts in New York have held that Section 5-527 should not be applied 690 retroactively. See In re Basix Corp., 1996 WL 517667, 6 (S.D.N.Y.1996) ("While New York General Obligations Law § 5-527 now provides that `[a] loan or other agreement providing for compound interest shall be enforceable,' this law should not be applied retroactively."); Pravin Banker Assoc. v. Banco Popular del Peru, 912 F. Supp. 77 (S.D.N.Y.1996); Chateaugay, 170 B.R. at 551. As the Pravin court stated, "a statute should be applied only prospectively absent clear language directing its retroactive application." Id. at 83. This Court adopts the Basix holding that New York law prohibits the retroactive recovery of compound interest and applies it in this case. CONCLUSION The judicial rule against the subordination of post-petition interest in unsecured claims absent express language to the contrary in the loan agreement evolved in order to prevent the inequitable treatment of junior creditors. The abolition of this rule would be a radical alteration in bankruptcy practice. The Appellants have simply failed to demonstrate that Congress intended such a change when it enacted Section 510(a) of the Bankruptcy Code. Such interpretation is not plausible, especially given the absence of any discussion of post-petition interest in the legislative history of Section 510(a). The more likely reading of that section is that it in fact codifies pre-bankruptcy Code practice. Given the long line of pre-Code case law supporting the ruling of the Bankruptcy Court and the lack of any indication that Section 510(a) overrules those cases, it would be unjudicious on the part of this Court to infer the radical change in bankruptcy practice that the Appellants seek. Therefore, the order of the Bankruptcy Court is AFFIRMED in its entirety. APPENDIX: Section 4.03 of the 1972 Indenture, entitled "Priority of Senior Indebtedness Upon Maturity of Debentures or Distribution of Assets," provides in relevant part: Upon . . . any payment or distribution of assets of the Company . . . to creditors upon any dissolution or winding-up or total or partial liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, all principal, premium, if any, and interest due or to become due upon all Senior Indebtedness shall first be paid in full . . . before any payment is made on account of the principal or, premium, if any, or interest on the Debentures, and upon any such dissolution or winding-up or liquidation or reorganization, any payment . . . to which the holders of the Debentures or the Trustee under this Indenture would be entitled shall be paid . . . directly to the holders of Senior Indebtedness . . . to the extent necessary to pay all Senior Indebtedness in full . . . before any payment or distribution is made to the holders of the Debentures or to the Trustee under this Indenture. Section 1.01 of the 1972 Indenture defines "Senior Indebtedness" in relevant part as follows: The term "Senior Indebtedness" shall mean (a) all indebtedness for money borrowed incurred by the company whether outstanding on the date of execution of this Indenture or thereafter created, assumed or incurred, except the 6% Convertible Subordinated Debentures due 1994 of the Company and such other indebtedness as is by its terms expressly stated to be not superior in right of payment to the Debentures, and (b) any deferrals, renewals or extensions of any such Senior Indebtedness, or debentures, notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness. Section 11.01 of both the 1984 Indenture and the 1985 Indenture, entitled "Agreement to Subordinate," provides in relevant part: The Company . . . covenants and agrees, and each holder of a Note likewise covenants and agrees by his acceptance thereof, that the obligation of the Company to make any payment on account of the principal of and interest on each and all of the Notes shall be subordinate and junior in right of payment-to the Company's obligations to the holders of Senior Indebtedness of the Company, to the extent provided herein, and that in the cases of insolvency, receivership, conservatorship, 691 reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Company as a whole, whether voluntary or involuntary, all obligations of the Company to holders of Senior Indebtedness of the Company shall be entitled to be paid in full before any payment shall be made on account of the principal of or interest on the Notes. . . . In addition, in the event of any such proceeding, if any payment or distribution of assets of the Company of any kind or character . . . shall be received by the Trustee or the holders of the Notes before all Senior Indebtedness of the Company is paid in full, such payment or distribution shall be held in trust for the benefit of and shall be paid over to the holders of such Senior Indebtedness . . . until all such Senior Indebtedness shall have been paid in full. Section 1.01 of both the 1984 Indenture and the 1985 Indenture define "Senior Indebtedness of the Company" to mean: (a) any indebtedness of the Company for money borrowed, whether outstanding on the date of execution of this Indenture or thereafter created, assumed, or incurred, other than the Notes. . . . Section 1301 of the 1989 Indenture, entitled "Agreement to Subordinate," is, for all relevant purposes, identical to Section 1301 of the 1987 Indenture. Those sections state, in relevant part: The Company . . . covenants and agrees, and each Holder of a Security likewise covenants and agrees by his acceptance thereof, that the obligation of the Company to make any payment . . . on account of principal (and premium, if any) of and interest on each and all of the Securities shall be subordinate and junior in right of payment to the Company's obligations to the holders of Senior Indebtedness . . . and . . . in the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Company as a whole, whether voluntary or involuntary, all obligations of the Company, to holders of Senior Indebtedness of the Company shall be entitled to be paid in full before any payment . . . shall be made on account of the principal of (and premium, if any) or interest on the Securities. . . . In addition, in the event of any such proceeding, if any payment or distribution of assets of the Company . . . shall be received by the Trustee or the Holders of the Securities before all Senior Indebtedness of the Company is paid in full, such payment or distribution shall be held in trust for the benefit of and shall be paid over to the holders of such Senior Indebtedness . . . for application to the payment of all Senior Indebtedness of the Company remaining unpaid until all such Senior Indebtedness shall have been paid in full. Section 101 of the 1987 Indenture and 1989 Indenture defines "Senior Indebtedness" in relevant part as: (a) any indebtedness of the Company for money borrowed, whether outstanding on the date of execution of this Indenture or thereafter created, assumed or incurred. . . . NOTES [1] The subordination agreements are contained in Sections 4.03 and 1.01 of the 1972 Indenture, Sections 11.01 and 1.01 of the 1984 Indenture and the 1985 Indenture, and Sections 1301 and 101 of the 1987 Indenture and the 1989 Indenture. Those sections are set forth in the Appendix to this opinion. See Appendix. [2] The Appellants argue that the rule of explicitness imposes an impossible burden on the Senior Creditors. Appellants' brief, p. 21. The court in Ionosphere, however, provided a clear example of the kind of language that would create a clear and explicit right to post-petition interest: Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in bankruptcy, reorganization, insolvency, receivership, or similar proceeding relating to the Company or its property or in an assignment for the benefit of creditors or any marshalling of assets and liabilities of the Company: (1) holders of the Senior Debt shall be entitled to receive payment in full of all Obligations with respect to the Senior Debt (including interest after the commencement of any proceeding at the rate specified in the applicable Senior Debt, whether or not such interest is an allowable claim in any such proceeding) before Securityholders shall be entitled to receive any payment of any Obligations with respect to the Securities. . . . Ionosphere, 134 B.R. 528, 535 n. 14.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1125029/	388 So.2d 781 (1980) STATE of Louisiana v. Charlie F. LINDSAY. No. 66872. Supreme Court of Louisiana. September 3, 1980. William J. Guste, Jr., Atty. Gen., Barbara Rutledge, Asst. Atty. Gen., Marion Farmer, Dist. Atty., Abbott Reeves, Asst. Dist. Atty., Director, Research and Appeals, for plaintiff-respondent. Anderson, Toledano & Courtney, Rykert O. Toledano, Jr., Covington, for defendant-relator. BLANCHE, Justice. Defendant was charged by bill of information with disturbing the peace by being intoxicated in violation of R.S. 14:103A(3) and with resisting an officer in violation of R.S. 14:108. Following a bench trial, defendant was acquitted of disturbing the peace but was found guilty of resisting an officer. For the latter offense, he was fined $150. We granted writs to review defendant's contention that he had a right to resist the officer because no probable cause existed to arrest him for any crime. 782 On the evening of November 22, 1978, two St. Tammany Parish police officers went to defendant's residence on Stafford Road to investigate a report of a domestic disturbance. According to Sergeant Grow, the driveway was blocked by two vehicles, so he and his partner, Deputy Sharp, exited their police car and separated such that Grow was walking past a cattle guard and up the driveway on the right side of the vehicles, while Sharp walked on the left side of the vehicles. At this point, defendant approached Grow and demanded to know why the officers were on his property. Defendant allegedly used an obscenity in connection with this demand. According to Grow, defendant appeared intoxicated and continued to ask the same question in a loud voice and while using obscenities. Grow testified that defendant noticed Deputy Sharp standing on the bumper of one of the vehicles and yelled "Get off my [obscenity] truck." Defendant then rushed past Grow in the direction of Sharp. At this point, Sergeant Grow arrested defendant, who fought the arrest by seizing a mirror on the truck with his hands. After the officers subdued defendant, they advised him of his Miranda rights and that he was under arrest for disturbing the peace due to his intoxication. Defendant and his witnesses presented an entirely different version of the incident. They claimed that as soon as defendant walked up the officers grabbed him and began beating him. The trial judge believed the officers' version of the facts, but acquitted defendant of the charge of disturbing the peace by being intoxicated because defendant was not in public but was on his own property. Defendant was convicted of resisting an officer, which is defined as: "... the intentional opposition or resistance to, or obstruction of, an individual acting in his official capacity and authorized by law to make a lawful arrest or seizure of property, or to serve any lawful process or court order, when the offender knows or has reason to know that the person arresting, seizing property, or serving process is acting in his official capacity. "The phrase `obstruction of' as used herein shall, in addition to its common meaning, signification and connotation mean: "(a) Flight by one sought to be arrested before the arresting officer can restrain him and after notice is given that he is under arrest. "(b) Any violence toward or any resistance or opposition to the arresting officer after the arrested party is actually placed under arrest and before he is incarcerated in jail. "(c) Refusal by the arrested party to give his name and make his identity known to the arresting officer. "(d) Congregates with others on a public street and refuses to move on when ordered by the officer." R.S. 14:108. It is a long-established principle in Louisiana law that a citizen has the right to resist an unlawful arrest. White v. Morris, 345 So.2d 461 (La.1977); City of New Orleans v. Lyons, 342 So.2d 196 (La.1977); State v. Lopez, 235 So.2d 394 (La.1970); City of Monroe v. Ducas, 203 La. 974, 14 So.2d 781 (1943); La.R.S. 14:108; C.Cr.P. art. 220. As was stated in a 1943 opinion, Monroe v. Ducas, supra: "The right of personal liberty is one of the fundamental rights guaranteed to every citizen, and any unlawful interference with it may be resisted. Every person has a right to resist an unlawful arrest; and, in preventing such illegal restraint of his liberty, he may use such force as may be necessary." 14 So.2d at 784. In a more recent opinion, we reaffirmed the right to resist an unlawful arrest, and concluded its basis is found in statutory law (R.S. 14:108, resisting an officer, supra, speaks of a lawful arrest; C.Cr.P. art. 220 requires a "person ... submit peacefully to a lawful arrest"), White v. Morris, supra, although there has been some suggestion that the right is constitutionally mandated as well. See Wainwright v. New Orleans, 392 U.S. 598, 88 S.Ct. 2243, 2253, 20 L.Ed.2d 1322 (1968) (Douglas, J., dissenting) (Writ 783 of Certiorari dismissed as improvidently granted due to inadequacy of record); White v. Morris, supra; State v. Lopez, supra. The sole question presented in this case is whether lawful grounds existed to arrest defendant. If not, then his conviction of resisting an officer in violation of R.S. 14:108 must be reversed because defendant's resistance of his arrest would have been an exercise of his right to resist an unlawful arrest. In his brief in behalf of the state, counsel asserts the arrest was lawful but does not explain the basis of this contention. In our review, we will consider the lawfulness of the arrest from two approaches: (1) Did defendant's intoxication provide probable cause for an arrest? (2) Was the arrest lawful, as the trial judge apparently concluded, because defendant's antagonistic language and movement toward Deputy Sharp constituted a violation of resisting an officer (R.S. 14:108) in that it was an obstruction of the officers' lawful authority to investigate? Defendant's Intoxication Although defendant was acquitted of disturbing the peace by being intoxicated, it remains possible that the officers did, in fact, have probable cause to arrest defendant on the charge, even though the state could not prove the offense beyond a reasonable doubt. Probable cause exists when the facts and circumstances known to the arresting officer, and of which he has reasonably trustworthy information, are sufficient to justify a person of ordinary caution in believing the person to be arrested has committed a crime. State v. Davis, 357 So.2d 519 (La.1978); State v. Dunbar, 356 So.2d 956 (La.1978); State v. Johnson, 192 So.2d 135, 249 La. 950 (1966). Disturbing the peace is "the doing of any of the following in such a manner as would foreseeably disturb or alarm the public:... (3) appearing in an intoxicated condition." R.S. 14:103. In State v. Jordan, 369 So.2d 1347 (La. 1979), we concluded that the words "foreseeably disturb or alarm the public", as found in R.S. 14:103, "encompass only conduct which is violent or boisterous in itself, or which is provocative in the sense that it induces a foreseeable physical disturbance." (Quoting from Garner v. Louisiana, 368 U.S. 157, 82 S.Ct. 248, at 253, 7 L.Ed.2d 207.) Like the trial judge, it is difficult for us to imagine how defendant's conduct on his own property, and under the circumstances of this case, could foreseeably have disturbed the public. The incident took place in a rural area outside of Covington. There is no evidence which indicates the encounter with defendant occurred close to any other dwelling place where the public might possibly be alarmed. In fact, the officers testified that no one except defendant's family observed the incident. Because we conclude no probable cause existed to believe defendant's conduct could have foreseeably disturbed or alarmed the public, defendant's intoxication did not provide grounds for his arrest for disturbance of the peace and his arrest cannot be justified on that basis. Interference with the Officers' Authority to Investigate The trial judge appears to have concluded defendant was guilty of resisting an officer in violation of R.S. 14:108, supra, because defendant's abusive language and move toward Officer Sharp interfered with the two officers' lawful authority to investigate. In State v. Huguet, 369 So.2d 1331 (La. 1979), we rejected the contention that interference with an officer's investigation is a violation of R.S. 14:108, resisting an officer. See also State v. Grogan, 373 So.2d 1300 (La.1979). We interpreted R.S. 14:108 as prohibiting conduct which obstructs officers "acting in their official capacity, while attempting to seize property, serve process or arrest ..." If the officer is not engaged in attempting one of those three things, then a defendant who opposes him cannot be considered guilty of resisting an officer. Consequently, any behavior of defendant, such as his movement toward Officer *784 Sharp, which may have interfered with the investigation, did not provide grounds for arrest of defendant for violation of R.S. 14:108. The arrest cannot be found lawful on that ground. For the above reasons, we hold that the arrest of defendant in this case was unlawful, and because he had a right to resist the unlawful arrest, his conviction of resisting an officer must be reversed. REVERSED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1132351/	828 So. 2d 520 (2002) Joe A. SLOWINSKI, et ux., v. ENGLAND ECONOMIC AND INDUSTRIAL DEVELOPMENT DISTRICT, et al. No. 2002-C-0189. Supreme Court of Louisiana. October 15, 2002. 522 Rebecca T. Boyett, John P. Doggett, Albin A. Provosty, Provosty, Sadler, Delaunay, Fiorenza & Sobel, for Applicant. Charles D. Elliott, Jimmy R. Faircloth, Jr., Faircloth & Davidson, Christopher J. Roy, Jacques M. Roy, for Respondent. KNOLL, Justice. The sole issue before this Court is whether the England Economic and Industrial Development District is an "instrumentality of the state," as stated in the Article X, Section 1 of the Louisiana Constitution of 1974, thus subjecting it and its employees to the regulations and control of the State Civil Service Commission. For reasons that follow, we reverse the lower courts and hold the England Economic Industrial and Development District is not an instrumentality of the state, but rather an autonomous unit of local government, and therefore exempt from the state civil service laws. FACTUAL AND PROCEDURAL BACKGROUND Prior to its closure by the United States Department of Defense in 1992, England Air Force Base was a pivotal actor in the economy of Rapides Parish. The military installation poured approximately $100 million annually into the local economy, and employed close to 3,000 military and 600 civilian personnel. Reacting to the devastating financial consequences that might arise from the base's absence, the Louisiana Legislature established the England Economic and Industrial Developmental District ("EEIDD") to facilitate the transition of the closed air force base into a viable economic asset for the Rapides Parish community. With the leadership and guidance of the EEIDD, the former England Air Force Base has become the home of 63 businesses, employing over 1,700 residents; over 300 occupied housing units; and Alexandria International Airport, which handles 55,000 flights and transports roughly 250,000 passengers per year. In August 1998, three former employees of EEIDD filed suit against EEIDD and its executive director for damages resulting from wrongful terminations. Plaintiffs alleged that EEIDD, as an instrumentality of the state, was mandated by Article X of the Louisiana Constitution to participate in the state civil service system, which in turn entitled plaintiffs to the benefits and protections afforded to classified employees. The most significant of these benefits and protections is the recognition that classified employees have a proprietary interest in continued employment and, therefore, cannot be disciplined or terminated except in accordance with the rules and regulations promulgated by the State Civil Service Commission. At trial, plaintiffs filed a Motion for Partial Summary Judgment on the issue of the applicability of Article X, Section 1 to the EEIDD. Following a hearing, the trial court granted plaintiffs' motion and later issued a final judgment finding EEIDD to be an instrumentality of the state and subject to the state civil service laws. EEIDD and its executive director appealed. 523 During the pendency of the appeal, however, plaintiffs and defendants reached a settlement and compromise, whereby the plaintiffs, with one exception, released EEIDD and its chief executive from all claims related to the matter. Plaintiff, Wilson Ewing, Jr., alone, reserved his right to continue litigating the issue of whether he was entitled to due process protections afforded classified state civil service employees. The Third Circuit, in an unpublished opinion, affirmed the judgment of the trial court, relying for the most part on this Court's decision in Polk v. Edwards, 626 So. 2d 1128 (La.1993) and the language contained in EEIDD's enabling legislation, specifically LA.REV.STAT. ANN. § 33:130.351, which states the EEIDD was designed "for the benefit of the people of the state" and performs "essential governmental functions of the state." We granted defendant's writ application to further study the correctness vel non of the lower courts' findings that the EEIDD is an instrumentality of the state. Slowinski et ux. v. England Economic and Industrial Development et al., 02-C-189 (La.3/28/02), 812 So. 2d 638. DISCUSSION A. Whether the EEIDD is Constitutionally Mandated to Abide By the State Civil Service Regulations Louisiana Constitution Article X, Section 1(A) provides that the "state civil service is established and includes all persons holding offices and positions of trust or employment in the employ of the state, or any instrumentality thereof ...." (emphasis added).[1] If a public entity is found to be an state instrumentality, it is constitutionally mandated that its employees be included within the state civil service system, since they are not otherwise excluded by its terms. Polk v. Edwards, 626 So. 2d 1128 (La.1993). Classified civil service employees have a property interest in retaining their positions, and cannot be terminated without due process of law. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 105 S. Ct. 1487, 84 L. Ed. 2d 494 (1985); AFSCME, Council # 17 v. State ex rel. Dep't of Health & Hospitals, 789 So. 2d 1263, 1267 (La.6/29/01). However, Article X, Section 1(A) also states that the state civil service shall not include "persons holding offices and positions of any... local governmental subdivision," and "local governmental subdivision" is defined as "any parish or municipality." LA. CONST. art. VI, § 44(1). Whether EEIDD is mandated by the Constitution to enroll in the state civil service system, this Court must determine (1) whether EEIDD is "an arm of the state" or state agency, or (2) whether EEIDD is sufficiently detached from the state that is more local and autonomous in nature, similar to a parish or municipal government. This determination requires a fact intensive inquiry, investigating the entity's powers and functions, as well as its interrelationship with the state. Polk, 626 So. 2d 1128 (La.1993); State Licensing Board of Contractors v. State Civil Service Commission, 123 So.2d (La.1960). Additionally, we find factors such as the geographic scope and level of autonomy are helpful in investigating the "relationship" prong of the analysis. Anderson v. Red River Waterway Commission, 231 F.3d 211 (5th Cir.2000).[2] 524 We find the facts discussed below clearly support that EEIDD is not an instrumentality of the state, but instead, more comparable to a parish or municipal government. By its own definition, EEIDD is a special district created by the legislature as a "unit of local government."[3] Significantly, EEIDD's enabling legislation, LA.REV.STAT. ANN. § 33:130.351-359, is contained in the Local Government section of the Louisiana Revised Statutes, Title 33, "Municipalities and Parishes," whereas state government is organized under Title 36, "Organization of Executive Branch of State Government." Moreover, EEIDD's jurisdiction and scope are limited to Rapides Parish. LA.REV.STAT. ANN. § 33:130.352 announces the district is created "to replace and enhance the economic benefits generated by the former air base" and LA.REV. STAT. ANN. § 33:130.351 states that the EEIDD is "composed of all of the territory located within Rapides Parish." EEIDD is also entirely governed from within Rapides Parish: members of the board of commissioners are required to be domiciliaries and registered votes of Rapides Parish, and membership is exclusively by appointment from local governing bodies within Rapides Parish.[4] LA.REV.STAT. ANN. §§ 33:130.353(A) & (B). Significantly, in addition to being geographically limited to Rapides Parish, EEIDD is entirely emancipated from state control and oversight. Nowhere in EEIDD's enabling legislation is there mention that any of the express powers bestowed require approval from the state. Indeed, EEIDD is granted the authority to adopt its own bylaws and other rules and regulations; to enter into contracts; to incur debt and issue general obligation bonds in its own name and behalf; to acquire property by gift, grant, purchase, 525 lease, expropriation or otherwise; to sell, transfer, and convey any property acquired by it; and to levy and collect ad valorem, sales, and use taxes. LA.REV. STAT. ANN. §§ 33:130.353, 33:130.355. The board of commissioners fills its own vacancies and also "elect[s] yearly from its number, a chairman, vice-chairman, secretary, and treasurer and establish[es] their duties as may be regulated by laws adopted by the board." LA.REV.STAT. ANN. § 130.353(G). Lastly, and of importance, the board is expressly declared to be "the appropriate governing body for all purposes provided in the Louisiana Enterprise Zone Act, R.S. 51:1781, et. seq., within the area comprised of property owned and formerly owned by the district, and shall have the power to perform all acts specified by applicable laws and regulations to achieve such purpose." LA.REV. STAT. ANN. § 33:130.355(18). The powers and functions entrusted to EEIDD, as well as its autonomous nature, are in stark contrast to those possessed by the entities that have been held by this Court to be instrumentalities of the state. For instance, in Polk v. Edwards, supra, this Court addressed the Casino Corporation, created by the legislature to adopt statewide rules for the conduct of specific games and gaming operations. The issue in Polk was the constitutionality of a provision in the Casino Act requiring employees of the corporation be exempt from the state civil service. This Court, however, recognized that the corporation is "accountable to the governor, the legislature, and the people of the state through a system of audits, reports, and legislative oversight, and through financial disclosure...." Id. at 1146 citing LA.REV. STAT. ANN. § 4:602(A). For instance, the board of directors are appointed by the governor and confirmed by the Senate. LA.REV.STAT. ANN. § 4:611(A)(1). For contracts to acquire an item, service, or product in the amount of $100,000.00 or more, the Casino Corporation is required to obtain authorization either pursuant to the Louisiana Procurement Code or special procedures adopted by the corporation. Id. at 1147 citing LA.REV.STAT. ANN. § 4:621(6)(a). Even further, any rule, regulation, or special procedure of the board requires legislative authority and publication of notice of intent in accordance with the Administrative Procedure Act. Id. citing LA.REV.STAT. ANN. § 49:953(A). Adding together these factors, we concluded: After considering its powers and functions, as well as its interrelationship with the state in many areas, we find that the Casino Corporation is an instrumentality of the state and is subject to the provisions of the civil service system. The Casino Corporation does not enjoy an existence separate from the state. It does not independently transact its business and hire its personnel. Furthermore, its actions determine the progress of the gaming industry, which the legislature has designed to assist the growth of tourism and generate revenue as a benefit to the general welfare. Id. at 1147. This Court undertook the same type of analysis in State Licensing Board of Contractors v. State Civil Service Commission, 110 So. 2d 847 (La.1959), holding the Contractors' Board to be a "state agency" under the Constitution of 1921[5] and thus 526 its employees were subject to the state civil service laws. In that case, the Board attempted to argue it was not a state agency because it is financed by contractors' license fees collected by itself rather than by state appropriations. We disagreed, noting the board's statewide regulatory powers and extensive entanglement with the state. For instance, the Board was created to "regulate the practice of contracting in Louisiana" and we pointed out that "[n]o person or firm can engage in contracting as defined by the statute unless licenced to do so by the Board ... nor may any awarding authority issue specifications or receive bids except by licenced contractors...." Id. at 849. Additionally, the Board operates almost entirely at the will of the Governor: it is statutorily required to obtain approval from the Governor for fees fixed pursuant to its authority; the board is mandated to file annual reports to the Governor; and membership to the Board is exclusively by appointment from the Governor. In the end, we concluded that the State Licensing Board of Contractor's "is clearly a state Board or agency; and, as such, it is subject under our State Constitution to regulation by civil service. There is not the slightest indication in the Act itself that the legislature intended otherwise." Id. at 849. When EEIDD's powers, functions, and relationship with the state are compared to the Casino Corporation or the Contractors' Board, it is clearly evident that EEIDD is a local and self-governing entity. Both the Casino Corporation and the Contractors' Board were entrusted by the legislature to regulate entire industries statewide and both are subject to extensive oversight and control from the state government. EEIDD, in contrast, is (a) comprised of, and limited to, territory located exclusively within Rapides Parish, (b) governed solely by residents of Rapides Parish, and (c) entirely independent from state supervision. Notwithstanding the overwhelming evidence which supports that EEIDD is a local and self-governing entity, plaintiff asserts, and the lower courts in part agreed, that because EEIDD is completely exempt from state taxation, and itself is entrusted with the power of taxation and expropriation, it must be an instrumentality of the state for purposes of the state civil service. We disagree. First, political subdivisions, which include municipal and parish governments, are entrusted with the power of taxation and expropriation, and as mentioned above, are not instrumentalities of the state. See LA. CONST. art. VI, § 30 ("A political subdivision may exercise the power of taxation...."); LA. CONST. art. VI, § 23 ("political subdivisions may acquire property for any public purpose by purchase, donation, expropriation, exchange, or otherwise.") (emphasis added). Secondly, we can find nothing in the Louisiana Revised Statutes, Civil Code, or even the jurisprudence that states that tax exempt status equates to being a state instrumentality. We are unwilling to find that because EEIDD, an autonomous unit of local government for all intents and purposes, has been exempted by the legislature from paying taxes, it should somehow be forced to abide by the regulations promulgated by the State Civil Service Commission. As such, we disagree with the lower courts that the EEIDD is a state instrumentality. We find it is clear that EEIDD 527 is an autonomous unit of local government, thus, it is not constitutionally mandated to follow the laws and regulations of the State Civil Service Commission. Although we find EEIDD is not constitutionally mandated to participate in the state civil service, our inquiry does not end here. We will next determine if the legislature intended EEIDD to participate in the State Civil Service Commission. B. Whether the Legislature Intended the EEIDD to Participate in the State Civil Service System We acknowledge the legislature possesses the power to designate a political subdivision to be an instrumentality of the state, and thus subject to civil service regulation, no matter how local or autonomous the entity might be. LA. CONST. art. X, § 15.[6] In finding EEIDD to be an instrumentality of state, both lower courts relied primarily on the language contained in LA.REV.STAT. ANN. § 33:130.354. Entitled "Governmental Functions," EEIDD's enabling legislation reads, in part: The exercise by the board of the powers conferred by this Subpart shall be deemed and held to be essential governmental functions of the state. As the exercise of the powers granted hereby will be in all respects for the benefit of the people of the state, for the increase of their commerce and prosperity, and for the improvement of their health and living conditions, the district shall not be required to pay any taxes, including, but not limited to, sales and use taxes, ad valorem, occupational licencing, income, or any other taxes of any kind or nature.... (emphasis added). Admittedly, phrases such as "essential governmental functions of the state" and "for the benefit of the people of the state" could be construed to imply a legislative intent for EEIDD to be considered a state instrumentality. However, we are more persuaded by the legislature's omission of an express declaration that EEIDD shall be considered an instrumentality of the state. Indeed, we have found numerous instances where the legislature has explicitly declared an entity to an instrumentality of the state, often using identical language. Consider for example: (1) Louisiana Stadium and Exposition District (LA. CONST.1921, art. XIV, § 47, continued as a statute by LA. CONST. Art. XIV, § 16(A)(10)) (emphasis added) "The District shall constitute an instrumentality of the state of Louisiana exercising public and essential governmental functions, and the exercise by the District of the powers conferred herein shall be deemed and held to be essential governmental functions of the state of Louisiana. As the exercise of the powers granted hereby will be in all respects for the benefit of the people of the State... the District shall not be required to any taxes or assessments ..." (2) Red River Waterway District (LA. REV.STAT.ANN. § 34:2308) (emphasis added) "The commission shall constitute an instrumentality of the State of Louisiana exercising public and essential 528 governmental functions; and the exercise by the commission of the powers conferred by this Chapter in the establishment, operation and maintenance of the waterway and the acquisition, construction, operation and maintenance of the various port and related facilities hereinafter authorized shall be deemed and held to be essential governmental functions of the state of Louisiana. As the exercise of the powers granted hereby will be in all respects for the benefit of the people of the state, for the increase of their commerce and prosperity, and for the improvement of their health and living conditions, the commission shall not be required to pay any taxes or assessments...." (3) Iatt Lake Water Conservation District (LA.REV.STAT.ANN. § 38:3085.4) (emphasis added) "The board shall constitute an instrumentality of the state of Louisiana, exercising public and essential governmental functions. The exercise by the board of the powers conferred by the Part shall be deemed to be essential governmental functions of the state. Because the exercise of the powers granted hereby will be in all respects for the benefit of the people of the state... the board shall not be required to pay any taxes or assessments..."[7] Because of the weighty consequences that arise when the legislature includes the term of art, "instrumentality of the state," i.e., an entity is required to participate in the state personnel management bureaucracy, it is unreasonable to assume our legislature overlooked it, when they made their intent proof positive in the statutes outlined above. See, e.g., Aultman v. Entergy Corp., 98-2244 (La.App. 1 Cir. 11/5/99), 747 So. 2d 1151, 1155 ("Had the legislature intended to adopt the requirements of the OWBPA, it would have unequivocally set forth those requirements as part of the state statute."). Accordingly, we find the terms "essential governmental functions of the state" and "for the benefit of the people of the state" do not necessarily reflect the legislature's intent to subject EEIDD to the State Civil Service Commission. As further convincing support for this finding, we note with significance that the legislature expressly declared the EEIDD, through its board of commissioners, shall "have the power to organize and reorganize the executive, administrative, clerical and other departments and forces of the district, and to fix the duties, powers, and compensation of all employees, agents, and consultants of the district." LA.REV.STAT. ANN. § 33:130.353(F) (emphasis added). Had the legislature intended EEIDD to be a state instrumentality, or more specifically, subject to the state civil service regulations, they would have created an impossibility as employee compensation and job classification are governed exclusively by the Civil Service Commission.[8] LA. 529 CONST. art. X(A)(1) ("[the state civil service commission] is vested with the broad and general rulemaking and subpoena powers of the administration and regulation of the classified service, including the power to adopt rules for regulating employment, promotion, demotion, suspension, reduction in pay, removal ... employment conditions, compensation and disbursements to employees...."). See also Louisiana Dep't. of Agriculture and Forestry v. Sumrall, 98-C-1587 (La.1999), 728 So.2d 1254,1261. CONCLUSION In sum, first we find that EEIDD is not constitutionally mandated to have its employees included in the State Civil Service Commission, because it is not an instrumentality of the state as stated in Article X, Section 1 of the Louisiana Constitution of 1974. EEIDD's powers, functions, and interrelationship with the state clearly demonstrate that it is an autonomous unit of local government. Secondly, we find the legislature did not intend for EEIDD to participate in the State Civil Service Commission, because the legislature did not declare that EEIDD was an instrumentality of the state, but instead expressly declared that EEIDD's employees fell under the control of the EEIDD, through its board of commissioners. LA.REV. STAT. ANN. § 33:130.353(F). Accordingly, we find the lower courts erred in finding otherwise and we must reverse. DECREE For the foregoing reasons, the judgments of the lower courts are reversed and set aside. Judgment is hereby granted in favor of the England Economic and Industrial Development District and Jon. W. Grafton, denying the motion for partial summary judgment filed by plaintiff, Wilson Ewing, Jr. This case is remanded to the district court for further proceedings, consistent with the views expressed herein. REVERSED AND REMANDED. JOHNSON, J., concurs. NOTES [1] Our Constitution also requires civil service compliance from cities having populations in excess of 400,000. LA. CONST. art. X, § 1(B). [2] In Anderson, the court addressed the issue of whether the Red River Waterway Commission was an "arm of the state" entitled to Eleventh Amendment immunity. Although Anderson did not directly address whether a public entity was an instrumentality of the state for purposes of state civil service, we find its analysis useful in examining a political subdivision's connection to the state. The Court of Appeals in Anderson used six factors as a guide in the determination of whether an entity is an arm of the state: (1) whether the state statutes and case law characterize the agency as an arm of the state, (2) the source of funds for the entity, (3) the degree of local autonomy the entity enjoys, (4) whether the entity is concerned primarily with local, as opposes to statewide, problems, (5) whether the entity has authority to sue and be sued in its own name, and (6) whether the entity has the right to hold and use property. Id. at 214. [3] EEIDD was also designated by the legislature, in LA.REV.STAT. ANN. § 33:130.351, to be a "political subdivision of the state as defined in Article VI, § 44(2) of the Constitution of Louisiana." Nonetheless, we recognize at the outset that the characterization of the EEIDD as a "political subdivision of the state" is not determinative of whether it is an "instrumentality of the state." Parish and municipal governments, which are expressly included in the definition of "political subdivision of the state," are expressly excluded from the state civil service. LA. CONST. art. X, § 1. See also Lee Hargrave, Limits on Borrowing and Donations in the Louisiana Constitution of 1975, 62 La. L.Rev. 137, 177 (2001) ("The reference to a political subdivision of the state is essentially a straightforward reference to local governments.") (emphasis omitted). [4] The members of the board of commissioners are appointed as follows: (a) three members appointed by the Rapides Parish Police Jury; (b) three members appointed by the mayor of the city of Alexandria, and confirmed by the city council; (c) one member appointed by the mayor of the city of Pineville, and confirmed by the board of aldermen; (d) one member appointed by a majority of the remaining incorporated municipalities in Rapides Parish, based upon resolutions approved by the respective boards of aldermen; and (e) two members nominated by the Chamber of Commerce of Central Louisiana, and appointed by resolutions duly adopted by majority votes of the Rapides Parish Police Jury and Alexandria City Council. LA.REV.STAT. ANN. § 33:130.353(A). [5] Under LA. CONST. of 1921, art. XIV, § 15, the classified Civil Service of the state included "all offices and positions of trust or employment in the employ of the State, or any department, independent agency or other agency, board or commission thereof ...." (emphasis added). Thus, we believe cases adjudicated before the enactment of our current Constitution are not controlling due to the obvious differences in language between the two constitutional provisions. See, e.g., State Civil Service Commission v. Audubon Park Commission, 99 So. 2d 920 (La.App.Orleans 1958). Nevertheless, we find that State Licensing Board of Contractors, the seminal case on this issue under the old Constitution, is helpful in further analyzing various governmental entities' relationships with the state. [6] LA. CONST. art. X, Section 15 reads in part: "Nothing in this Part shall prevent the establishment by the legislature of a parish civil service system in one or more parishes, applicable to any or all parish employees ... or the establishment by the legislature ... of a municipal civil service system in one or more municipalities having a population of less than four hundred thousand, in any manner now or hereafter provided by law." See also Civil Service Commission of the City of New Orleans v. Foti, 349 So. 2d 305 (La. 1977). [7] See also LA.REV.STAT. § 34:3268 (Cane River Waterway District); LA.REV.STAT. ANN. § 38:2324(A) (Sabine River Authority); LA.REV.STAT. ANN. § 2:341(A) (Ascension St. James Airport and Transportation Authority); LA.REV.STAT. ANN. § 33:7807 (St. Bernard Parish Water and Sewer Commission); and LA.REV.STAT. ANN. § 34:2308 (Louisiana Crawfish Market Development Authority). [8] Although the determination is not relevant to our holding, this Court questions whether plaintiff even has standing to challenge EEIDD's failure to participate in the state civil service system. Defendants did not raise this issue, however, we can recognize the peremptory exception of no right of action sua sponte. Plaintiff's argument essentially is that because the EEIDD is an instrumentality of the state, he is a classified employee entitled to due process protections before termination of employment. However, without filling out a pre-employment application or taking the civil service exam, there is no way to determine whether plaintiff would even qualify in his own right to become a classified employee. See State ex rel. Murtagh v. Department of City Civil Service, 215 La. 1007, 42 So. 2d 65 (La.1949) (the fundamental purpose running through civil service laws is that positions shall be filed by competitive examinations). This question was directly answered by the Louisiana Fourth Circuit Court of Appeal in Digerolomo v. French Market Corp., 272 So. 2d 385 (La.App. 4 Cir.), writ refused, 275 So. 2d 784 (1973). In Digerolomo, the court maintained defendant's exception of no right of action, holding that the general manager of city owned corporation who did not legally comply with requirements which would bring him under classified service could not urge that he was entitled to benefit of classified service. Nonetheless, this court is cognizant of the United States Fifth Circuit Court of Appeals decision in Wallace v. Shreve Memorial Library, 97 F.3d 746 (5th Cir.1996), in which the court ruled that the fact that the appellant did not obtain her position through competitive exam or otherwise comply with the civil service requirements did not remove her from the civil service system. In that case, this Court had earlier declined to accept the Fifth Circuit's certified question on the subject. Because we are disposing of the present case on other grounds, we pretermit this issue for another day.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1688721/	815 So. 2d 105 (2002) Succession of Jo-El Stengel SMITH a/k/a Mrs. Milton J. Smith. No. 2002-C-0633. Supreme Court of Louisiana. May 3, 2002. Denied.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1691880/	525 F. Supp. 1150 (1981) Daniel DONNELLY, et al. v. Dennis LYNCH, et al. Civ. A. No. 80-0669. United States District Court, D. Rhode Island. November 10, 1981. 1151 1152 1153 Sandra Blanding, Warwick, R. I., for plaintiffs. Maryfrances McGinn, City Sol., City of Pawtucket, Pawtucket, R. I., William F. McMahon, Providence, R. I., for defendants. OPINION AND ORDER[] PETTINE, Chief Judge. The First Amendment of the United States Constitution begins, "Congress shall make no law respecting an establishment of religion." By incorporation through the Due Process clause of the Fourteenth Amendment, Abington School District v. Schempp, 374 U.S. 203, 215-16, 83 S. Ct. 1560, 1567-68, 10 L. Ed. 2d 844 (1967), this prohibition against official support of, and affiliation with, religious philosophies and institutions applies as well to the actions of state and local governments. In this case, the Court must decide whether the City of Pawtucket's ownership and erection of a nativity scene as part of its annual Christmas display violates this fundamental restriction on governmental power. The plaintiffs are the Rhode Island affiliate of the American Civil Liberties Union (ACLU), Daniel Donnelly, George Kriebel, Robert Goodwin and A. Gregory Frazier. George Kriebel is and has been a real estate tax paying resident of the City of Pawtucket since February 1980. Robert Goodwin is and has been a personal property tax paying resident of said city since 1976. A. Gregory Frazier is and has been a personal property tax paying resident of Pawtucket since 1980. Daniel Donnelly, the original plaintiff, has resided in Pawtucket for four years and is a registered voter there. (I, 1154 7)[1] Although he is liable to Pawtucket for personal property taxes, he has failed to pay them. At all times pertinent to this case the plaintiffs have been members of the Rhode Island affiliate of the ACLU. The defendants are Dennis Lynch, mayor of Pawtucket at the inception of this case and during the Christmas, 1980, display;[2] Richard Mumford, the City's Finance Director and chief fiscal officer (II, 1-2); Guy Dufault, Director of Parks and Recreation and Supervisor of the planning and implementation of the Christmas display (I, 64-66); and the City itself. This action was filed one week before Christmas, 1980. Plaintiffs initially sought a temporary restraining order requiring immediate removal of the creche from the City's holiday display. At a conference with the Court, the defendants stated their firm intention to continue to include the nativity scene in future Christmas displays.[3] Assured by this representation that the issue would not become moot, plaintiffs agreed to withdraw their request for emergency relief in order to permit the Court sufficient time to receive evidence and afford the case the deliberate consideration which the issues deserved. The case proceeded to trial on an accelerated schedule, with the parties agreeing that the Court would then render a final decision on the merits.[4] In the course of trial, however, a serious question arose as to Mr. Donnelly's standing as a taxpayer. On August 31, 1981, the Court issued a "Tentative Opinion" holding that Mr. Donnelly lacked standing to litigate this case as a taxpayer. Counsel were advised that the Court was prepared to hear argument on this point. On October 15, 1981 the Court granted plaintiff's motion to amend the complaint to add the other present plaintiffs as parties. Through this motion the original plaintiff sought to remedy the absence of standing. The filing and litigation of this case have generated an extraordinary outpouring of public comment in Pawtucket and surrounding communities. The facts are as follows: Hodgson Park, the location of the Christmas display, is a privately owned open space area of approximately 40,000 square feet. (II, 81-82). Bounded by Roosevelt Avenue, Main Street, and Broadway, the Park lies in the heart of the downtown shopping district. (I, 90-91). The City's two largest retail establishments are within walking distance of the Park, as is City Hall. With the private owner's permission, the City enters Hodgson Park each year in November and erects a lighted Christmas display. (I, 65-66, 75).[5] City employees, or 1155 city-paid contractors, perform the setup work. (I, 66, 70). The City owns the lights, figures, and buildings that make up the display, (I, 85-90); it reimburses the private owner for all the electricity used by the display. (I, 72). Subject to the final approval of the Director of Parks and Recreation, a City maintenance supervisor designs the layout of the display. (I, 66). The Mayor may make changes in the layout. (II, 52).[6] The 1980-81 display contained the following: a "talking" wishing well Santa's House, inhabited by a live Santa who distributed candy a grouping of caroler/musician figures in old-fashioned dress, standing on a low platform surrounded by six large artificial candles a small "village" composed of four houses and a church four large, five-pointed stars covered with small white electric lights three painted wooden Christmas tree cutouts a live, 40' Christmas tree strung with lights a spray of reindeer pulling Santa's sleigh, set on an elevated runway a long garland hung from candy-striped poles cutout letters, colored in fluorescent paint, that spell "SEASON'S GREETINGS" 21 cutout figures representing such varied characters as a clown, a dancing elephant, a robot and a teddy bear the nativity scene at issue in this case Also, small colored lights festooned the trees growing in and near the Park. A schematic of the display, prepared by the City,[7] has been filed with the Court. To visualize the layout of the display, some physical description of the Park is necessary. The Park is roughly bisected by the Blackstone River. (I, 90). The East half rises in a moderate slope to Broadway Street. The West half is bounded by Roosevelt Avenue, a main thoroughfare, and Main Street; it is on this half that most of the display is placed. On this perimeter of the Park, there are four bus stops, two of which have shelters. Two sets of stairs lead down into the Park from the Roosevelt Avenue sidewalk. Persons standing at the bus stops and walking along that sidewalk would have the best view of the display. (I, 114-15). The nativity scene occupies the foreground of the display. The stable opens towards Roosevelt Avenue and all the figures are visible from that side. Looking down into the Park from the bus stops, the wishing well and Santa's House appear on the extreme left of the nativity scene. Behind and above the creche loom Santa's sleigh and reindeer. To the right of the creche are the live Christmas tree, the small "village," and the carolers, which face Roosevelt Avenue. (I, 94).[8] 1156 The figures in the nativity scene are approximately life sized. (I, 101-02).[9] They include kings bearing gifts, shepherds, animals, angels, and Mary and Joseph kneeling near the manger in which the baby lies with arms spread in apparent benediction. All of the figures face the manger in which the baby lies; several have their hands folded and/or are kneeling. The figures' poses, coupled with their facial expressions, connote an atmosphere of devotion, worship, and awe. The stable is, inexplicably, shored up with two hockey sticks. Some of the figures are chipped, and the paint on several is peeling. The nativity scene was purchased by the City in 1973 for $1,365. (I, 71-72). No money has since been expended on its maintenance. (Id.) This amount was comparable to that expended to purchase the three other large groupings the carolers, the "village", and Santa's sleigh that are part of the current display. The creche is assembled, removed, and stored by City workers; these tasks take a total of two worker-hours. (I, 67-68). Some additional time is spent by the City electrician in hooking up two spotlights to shine on the nativity scene. (I, 69). The Parks Director estimated that of the $4,500 spent for these employee services, about $20 was attributable to the creche. (I, 85). The City also spent a small amount, probably under $20, for spotlights, bulbs and holders to light the creche, (I, 78-79) and Pl.Ex. 7, and some unspecified sum for the electricity these use. (I, 72). When the Hodgson Park display is opened, ceremonies at the Park are held in conjunction with those at City Hall, 300 feet away. Santa arrives at the Park in a City fire truck. He and the Mayor throw a switch, illuminating the lights at the Park and City Hall. Santa then goes to his House in the Park and distributes candy to the children. The "talking" wishing well also begins operation. The sound system that broadcasts Christmas carols through the Park is the same one used at City Hall (I, 102, 104).[10] During the trial of this case the Court received testimony from several individuals. This testimony bore on the purpose and the effect on viewers of Pawtucket's nativity scene and also on any political divisiveness that erection of the creche has caused. The Court will now summarize this testimony. Plaintiff Donnelly testified that he first saw the Hodgson Park display, including the nativity scene in December, 1980. (I, 8, 10, 20). He stated that he viewed the creche as a religious display depicting the birth of Christ, and that he knew that it was sponsored by the City. (I, 11-14, 29). Perceiving this as a demonstration of official support for a particular religious viewpoint, which ran contrary to his strong belief in the separation of church and state, Mr. Donnelly testified that his reaction was one of fear. (I, 11-13). He explained that he regarded the City's use of the nativity scene as exemplifying an increasing tendency of various religious groups to become more political and thereby to impose their views on the larger society. (I, 11). In response to questioning by the City's attorney, Mr. Donnelly stated that he does not consider Santa Claus and the Christmas tree to be religious symbols because, unlike the nativity scene, they are not referred to or described in religious documents such as the Bible. (I, 28). He further testified that he did not regard the nativity scene as merely a component of the entire Hodgson Park display. He distinguished it from the other decorations on grounds that the creche "attempted to tell a complete story in itself the story of the birth of Christ." (I, 28-29). 1157 The other plaintiffs, George Kriebel, Robert Goodwin, and A. Gregory Frazier, have all stated[11] that Pawtucket's nativity scene represents to them a religious display depicting the birth of Christ. Furthermore, they view the City's erection of the creche as demonstrating the City's support for the Christian religion. Finally, these plaintiffs have stated that the City's erection of the nativity scene has offended their interest in the separation of church and state. Steven Brown, Executive Director of the ACLU,[12] saw the creche twice in December, 1980. (I, 43). Like Mr. Donnelly, he regarded it as a religious symbol which, by its inclusion within the City's display, represented official sponsorship of a particular religious viewpoint. (I, 43-44). He explained that he viewed the nativity scene as a clearly religious symbol despite being surrounded by non-religious figures. (I, 56, 63). Mr. Brown also noted that certain components of the nativity scene, such as the angels, the Madonna, the figures kneeling in adoration, had independent religious significance. (I, 53, 62). Although he agreed that the birth of Christ was a historical fact, he testified that the nativity scene signified to him more than merely historical fact. (I, 63). Mr. Brown was raised and educated in the Jewish faith. (I, 53). Mr. Brown also testified about public reaction to the ACLU's prosecution of this lawsuit. His impression of this reaction was based on phone calls received by the ACLU at its office, see, e. g., (I, 41) and in response to a three hour call-in "talk show" in which Mr. Brown subsequently participated. It was also derived from Letters to the Editor published in the Providence and Pawtucket newspapers. (I, 49). Mr. Brown stated that some of the callers felt that the ACLU was "making a mountain out of a molehill" and that some regarded the display as secular in nature. (I, 52).[13] However, he felt that most people did not regard the religious element as incidental or minor. (I, 52-53). Rather, his impression was that the issue was not regarded as trivial (I, 61-62), and that many 1158 people perhaps the clear majority felt that the City had a right to sponsor and support the religious views of the majority. (I, 48-49, 64). Former Mayor Lynch, testifying about the purpose of the Hodgson Park display in general, stated that community morale was one of the principal reasons for the City's sponsorship of the Christmas display. (II, 76). He likened it to the City's Fourth of July, Memorial Day, and Veterans Day festivities, the other main "cultural and traditional" events that the City sponsors. (II, 83-84). He also emphasized the importance of the Hodgson Park display to the downtown merchants, who rely heavily upon it as a draw for holiday shoppers. (II, 78-82). In furthering this commercial function of the display, Lynch testified, the City works with the downtown merchants' association in planning the size and timing of the display. (II, 78-79, 85-86). The utilization of Hodgson Park in this fashion is part of the downtown redevelopment effort. (II, 84-86). When asked specifically about the role of the nativity scene, the Mayor initially stated that the creche was "central" to the City's Christmas experience for "three basic reasons": cultural and traditional, aesthetic, and economic. (II, 54-55). Later in his testimony, Mayor Lynch stoutly maintained that the creche was "incidental to" and "not the primary reason" for the overall display. (II, 77, 91). After some initial equivocation when questioned by plaintiffs on the point, (II, 53-54, 63-65), the Mayor responded to defense counsel's inquiry by stating that he would erect the display without the creche if necessary. (II, 76-77). He said that he "would assume and hope" that, even without the nativity scene, the display would still promote morale. (II, 91). The Mayor concluded, however, that "most people" would be "upset" if the City had to remove the nativity scene. (II, 54). Noting that a creche has been displayed as part of Pawtucket's Christmas decorations for at least 40 years, (II, 62, 75), the Mayor stated that he had never received or heard of a complaint about it prior to this lawsuit. (II, 57, 62, 75).[14] Since the lawsuit, he has received over a hundred phone calls and numerous letters. (II, 57). It is the Mayor's impression that people were shocked and outraged over the suit because it questioned what had been an accepted community tradition for 40 years. (II, 58, 60, 67-68). In the Mayor's view, people "had made the simple assumption that this would always be there because it was a good thing, and they're outraged again over the questioning of what is good for all." (II, 60). Criticizing the lawsuit for bringing into the community a divisiveness that "had never been seen" before in Pawtucket, (II, 65), the Mayor explained the public reaction by suggesting that people "thought it was very small of anybody to question what had been accepted by the community" for so many years "as a good thing." (II, 67-68). After the lawsuit was filed, the Mayor held a "press conference" at Hodgson Park. (II, 55). A podium was set up specifically for the event in front of the nativity scene. (I, 117-18; II, 55-56). There had never before been a press conference at the display. (II, 75). The subject of the gathering was this lawsuit. (Id.). The Mayor led the crowd of municipal workers and school children in caroling. According to newspaper accounts that were part of the Mayor's file and were introduced into evidence by plaintiffs without objection from the City,[15]1159 the press conference was more in the nature of a rally, with the Mayor talking emotionally about patriotism, freedom and the Pawtucket tradition of a nativity scene, and vowing to fight vigorously the ACLU's attempt to take Christ out of Christmas. At some point after filing of the suit, the Mayor announced his intention to include a menorah in next year's display. (II, 73). He explained at trial that he regards the menorah as "a very important thing to have as part of" the display, (II, 73), not only as a symbol of Judaism but also as "part of our culture, tradition, and an historical fact." (II, 74). He denied having said at the press conference, as reported, that this addition would be made "in honor of our Jewish brethren who have supported us in this." (II, 73). The Mayor noted that at least one segment of the Jewish community in Pawtucket has called him to express support and to state that they regard the inclusion of the nativity scene as "a thing of joy and not a religious service or observance of any kind." (II, 76). He stated that he does not know of anyone ever having visited the Christmas display for the purpose of worship. (II, 77-78). Two Pawtucket businessmen, active in promoting the commercial development of the downtown area, reiterated the Mayor's assessment of the importance of the Hodgson Park display to the Christmas shopping trade. Myron Stoller, a downtown retail merchant, noted that 25% of his annual business is done between Thanksgiving and Christmas and emphasized the importance of promotions such as the Hodgson Park display. (III, 1-7). He thought that the nativity scene added "absolutely nothing" to the impact of the display for commercial purposes. (III, 4, 7). Mr. Stoller, who is Jewish, does not object to the inclusion of the creche and has never heard any complaints about it. (III, 4-5). Dennis Moore, another local businessman and executive director of Downtown Pawtucket Revitalization, Inc., characterized the Hodgson Park display as "a key link in bringing commerce into the City." (III, 12). He agreed that the display's business impact would not be affected by removal of the nativity scene. (III, 14-15). Each side presented expert testimony on the nature and effect of the nativity scene. Michael Werle, a licensed clinical psychologist about 40% of whose patients are children, (II, 19-24), testified about the important role that symbols play in a child's development of a self-image. (II, 25). He regarded the nativity scene as a very powerful symbol of worship, different from such secularized elements of the display as Santa Claus, Christmas trees and gift-giving. (II, 26-28). He felt that the symbol's impact on a child would be heightened by the magical quality of the display's bright lights and gifts of candy from Santa. In his opinion, a child of a non-Christian family, upon seeing the creche as part of a public display, would wonder whether he and his parents were normal. (II, 27-28, 39). He agreed that such self-doubt would arise only in children who understood the difference between public and private settings. (II, 31, 40-42, 44).[16] Furthermore, Dr. Werle felt that Pawtucket's inclusion of the creche in its Christmas display "reinforces [in Christian adults] an already prevalent attitude in our country that we are a Christian country." (II, 28). Dr. Werle believed that, by "encourag[ing] people who already confuse being American with being Christian," the City's practice breeds religious chauvinism and leads to the view that non-Christians are "somewhat less important and have less merit." (II, 28-29). Finally, he felt that nonbelieving adults would be insulted by the City-sponsored creche, but not "profoundly affected" by it. (II, 29). Thomas Ramsbey, an ordained United Methodist minister and a college professor 1160 with a Ph.D. in the sociology of religion and religious ethics, (II, 93-94), testified as to the religious symbolism of the nativity scene. Dr. Ramsbey noted that, although there is no bright line between religious and non-religious symbols, an approach commonly used in the analysis of symbols defines "sacred" symbols as those which are clearly associated with a particular group. (II, 95-96). By contrast, "profane" (or secularized) symbols are not closely tied to particular groups; rather, they "belong" to everyone. (Id.). In contrast to the other elements of the Hodgson Park display, which he does not consider "sacred," (II, 105-06, 108-09), Dr. Ramsbey regards the creche as a very sacred religious symbol of Christianity. (II, 97, 114). He noted that the nativity scene depicts the birth of Christ as recounted in the Gospels of Matthew and Luke. The figures including the animals are in a worshipful pose; angels, regarded as messengers from heaven, are present. In his view, "the whole setting of the creche is a statement about the divinity, if you will, or the extraordinariness of the birth of this baby." (II, 98). Tying this to the theory that it is group affiliation which makes a symbol "sacred," Dr. Ramsbey pointed out that this belief about the special nature of Jesus Christ distinguishes Christians from other groups. (II, 114). He explained that the representation of the birth of Christ in the creche is a combination of historical fact and "the faith of the early church." (II, 98). Dr. Ramsbey stated that the Methodist Church uses the creche as part of its worship and expressed dismay that the City had demeaned this Christian religious symbol by setting it in the midst of other, non-religious symbols. (II, 97, 104, 113).[17] On cross-examination, Dr. Ramsbey agreed that Christmas is in part a secular celebration belonging to the whole American culture. He insisted, however, that parts remained deeply religious and associated only with Christianity. (II, 109-12). Defendants' expert, David Freeman, is a Professor of Philosophy at the University of Rhode Island and has done scholarly work in the fields of religious philosophy and religious symbolism. (III, 15-17). The essence of Dr. Freeman's testimony was that symbols "function contextually." (III, 33). Dr. Freeman testified that symbols have both objective and subjective dimensions. (III, 17-18). He emphasized that a religious symbol "doesn't occur in a vacuum, it occurs in a context." (III, 18). Defining a religious symbol as one that evokes "a religious response, an attitude of worship, of awe, a respect for the holy, a respect for the sacred," (Id.), Dr. Freeman stated that whether a symbol evokes a religious response "depends upon the attitude of the person viewing that symbol and where it's found." (III, 18). 1161 In Dr. Freeman's view, the purpose of the creche in the Hodgson Park display is "to help celebrate Christmas." (II, 27). He regards the nativity scene as "essential" in a Christmas display because otherwise "it would be like having a birthday party without knowing whose birthday it was." (III, 22-23). He likened the significance of Christ's birth to that of George Washington's. (III, 22). Furthermore, Dr. Freeman thought that the creche "put [people] into a Christmas mood where they would, in that context of the scene as it occurs, be more inclined to spend money in shopping." (III, 27). He summarized: "A symbol in a religious context would be a religious symbol and have a religious impact. A symbol in a nonreligious context will not be a religious symbol and will not have a religious impact." (III, 27-28). In Professor Freeman's view, a creche displayed in a church "would definitely be making a religious statement." (III, 32). In Hodgson Park, it is merely part of the whole: "[People] are not going there to worship or to pray, they're going there to shop, and the function the display would have for most people at least the great majority, if not all would seem to be to participate in the Christmas spirit, brotherhood, peace, and let loose with their money." (III, 19). Personally, Dr. Freeman does not attach any religious significance to the creche; indeed, he finds the Hodgson Park display aesthetically displeasing. He perceives a discord in lumping together Santa Clause, Christmas trees and "something which is obviously still in many peoples' minds of a religious origin." (III, 23). Of the exhibits introduced by the parties, only three require separate discussion. These are the packet of Letters to the Editor collected by Steven Brown, the file of cards and letters received by former Mayor Lynch in connection with this suit, and the file of newspaper clippings kept by Lynch and containing many of the same Letters to the Editor that appeared in Brown's collection. Approximately 70 letters relating to the creche and/or the lawsuit are included in these exhibits. Only three do not endorse the position taken by the City or more particularly, by Mayor Lynch, in this case.[18] The letters expressing support vary greatly in style and content, but certain generalizations can be made. The most recurrent comments appearing in over half the letters are that the birth of Christ is the essence of Christmas, and that the presence of the creche, as a symbol of this spiritual core, is necessary to preserve the true meaning of the holiday. Although about 10% of the letters expressed the view that the nativity scene represented simply the general moral and ethical aspirations of goodwill, peace, and love, the clear majority of writers regarded the dispute over the nativity scene as implicating religious beliefs and values. The Mayor's insistence on preserving the creche was lauded by many as a determination to "keep Christ in Christmas" and, more broadly, to keep God in American life. Several letters decrying the loss of a City "tradition" indicated that their writers viewed the creche's central role as portraying the religious aspect of Christmas. Some writers perceived the lawsuit as a confrontation between believers, whose right to express their faith was being threatened, and nonbelievers. In several letters, the writer expressed abhorrence for "the minority's" attempt to dictate to the "majority" what symbols could be displayed and revered. Some advocated allowing taxpayers or voters to decide how the City should spend their money. A few vigorously contested the desirability or even the possibility, of separating the religious and political spheres. It would be inappropriate to quote portions of any of these letters because of the difficulty of selecting a truly representative cross-section. After reviewing them, however, the Court is firmly convinced that 1162 they evidence a deep concern about and resentment for what most of the correspondents regarded as an attack on a cherished religious symbol. Although many letters criticized the ACLU as "petty," most writers did not mean that the creche was an insignificant part of the display. Indeed, the intensity of feelings evident in the letters belies any suggestion that the writers regarded this lawsuit as involving a trivial matter. As Mayor Lynch himself said, "I've never seen people as mad as they are over this issue." (II, 66). The asserted "pettiness" lay in the ACLU's decision to challenge what most regarded as the central symbol of Christmas rather than avoid the Hodgson Park area if the creche offended members of the ACLU. Overall the tenor of the correspondence is that the lawsuit represents an attack on the presence of religion as part of the community's life, an attempt to deny the majority the ability to express publically its beliefs in a desired and traditionally accepted way. In the Mayor's words, "The people absolutely resent somebody trying to impose another kind of religion on them .... I think the denigration, trying to eliminate these kinds of things, is a step towards establishing another religion, non-religion that it may be." (II, 66-67). I At the outset; this Court finds that the plaintiffs Kriebel, Goodwin and Frazier have standing to litigate this case. Even before Flast v. Cohen, 392 U.S. 83, 88 S. Ct. 1942, 20 L. Ed. 2d 947 (1968), recognized the standing of federal taxpayers to challenge governmental expenditures on establishment clause grounds, municipal taxpayer standing had been permitted in this area. See e. g. McCollum v. Board of Education, 333 U.S. 203, 206, 68 S. Ct. 461, 462, 92 L. Ed. 649 (1948), citing Coleman v. Miller, 307 U.S. 433, 59 S. Ct. 972, 83 L. Ed. 1385 (1938). Cf. Frothingham v. Mellon, 262 U.S. 447, 486-87, 43 S. Ct. 597, 600-01, 67 L. Ed. 1078 (1923) (contrasting stake of federal taxpayer with that of municipal taxpayer for standing purposes). Thus, there is little doubt that Kriebel, Goodwin and Frazier, who pay taxes to Pawtucket, can challenge the City's maintenance of the creche.[19] II The Supreme Court, in one of its major Establishment Clause opinions, noted wearily that "cases arising under the [Religion] Clauses have presented some of the most perplexing questions to come before this Court." Committee for Public Education v. Nyquist, 413 U.S. 756, 760, 93 S. Ct. 2955, 2958, 37 L. Ed. 2d 948 (1973). The difficult problem is to define "the [elusive] line which separates the secular from the sectarian ..." Abington School District v. Schempp, 374 U.S. at 231, 83 S.Ct. at 1576 (Brennan, J., concurring). Before applying the familiar three-prong test prescribed by the Supreme Court for analysis of Establishment Clause problems, it is necessary to address two arguments made by the City which call into question whether this case presents an Establishment Clause problem at all.[20] Specifically, 1163 the defendants contend first that the erection of the creche has not involved the City in religious activity to any significant degree. They claim that the presence of the creche in the Christmas display merely acknowledges a religious component of an important secular holiday that is celebrated by all Americans. Second, the City also argues that the nativity scene has become largely "secularized" so that its nature or function within the Hodgson Park display is not primarily religious. Each argument is considered in turn. A. Christmas as a Secular and Religious Holiday The City argues first that "the dominant purpose and effect of the Christmas display and each component of that display (including the nativity scene) is to celebrate a national holiday in keeping with its raison d'etre ..." (Memo at 8). It continues, "The function of the nativity scene in the celebration of Christmas is really no different from the function of religion in the celebration of Christmas as a national holiday." (Id. at 9-10). It reasons, "Since the religious character of [Christmas] does not invalidate its observance because of an independent secular justification, a celebration of that holiday which includes a religious component ought not to constitute an establishment as long as the religious component is placed in its appropriate secular context." (Id. at 11). In the Court's view, this reasoning is born of a fundamental misperception of the meaning of the Establishment Clause. Although no case to the Court's knowledge has specifically considered the legitimacy of designating Christmas as a national holiday, the courts that have considered the propriety of governmental participation in various displays and practices connected with Christmas have recognized the obvious fact that Christmas, as celebrated in 20th century America, has a decidedly secular dimension. See, e. g., Florey v. Sioux Falls School Dist., 619 F.2d 1311, 1316 (8th Cir.), cert. denied, 449 U.S. 987, 101 S. Ct. 409, 66 L. Ed. 2d 251 (1980); id. at 1325 (McMillan, J., dissenting); Allen v. Hickel, 424 F.2d 944, 948 (D.C.Cir.1970); Citizens Concerned for Separation of Church and State v. Denver, 508 F. Supp. 823 (D.Colo.1981). This is the Christmas whose central figure is Santa Claus and whose themes are the nontheological ones of goodwill, generosity, peace, and less exaltedly, commercialism. Yet it is equally obvious that for the many 20th century Americans who practice Christianity, there is another Christmas. This is the "original" Christmas whose central figure is Christ, the Son of God, and whose themes are the essentially theological ones of salvation and spiritual peace, renewal, and fulfillment. The City argues that the emergence of a secular dimension to Christmas has rendered the holiday's meaning merely vestigial. The Court does not agree.[21] Christmas remains a major spiritual feast day for most sects of Christians. It has not lost its religious significance; rather, it has gained a secular significance. Janus-like, it is one holiday with two distinct and very different faces. If government can, consistent with the Establishment Clause, declare and celebrate Christmas as a national holiday, it is precisely because of this dichotomous nature that is, because the religious elements of Christmas can be separated out and the secular elements presented more or less in isolation. This is not an uncommon situation in the Establishment Clause area. Recognizing that religion is a real and pervasive 1164 component in American life, the Supreme Court has never held that the presence of a religious element in an activity automatically places it beyond the purview of government involvement. As long as there are also strong secular elements, the government may involve itself with the activity if it limits itself to promoting only those elements. For example, although recognizing that "the place of the Bible as an instrument of religion cannot be gainsaid," Abington School District v. Schempp, 374 U.S. at 224, 83 S.Ct. at 1572, the Court has held that the Bible possesses an independent literary and anthropological value that makes it a permissible object of study in the public schools in the course of a curriculum designed to emphasize those elements. In an analogous area, the Court has held that sectarian colleges and universities have sufficiently separable elements that government can, with care, structure its programs to aid the latter without impermissibly advancing the former. Tilton v. Richardson, 403 U.S. 672, 680-82, 91 S. Ct. 2091, 2096-97, 29 L. Ed. 2d 790 (1971). In involving itself with one of these activities that possesses a dual significance, government must, however, be exceedingly careful that it indeed acts to advance only the secular elements. A case in point is Stone v. Graham, 449 U.S. 39, 101 S. Ct. 192, 66 L. Ed. 2d 199 (1980) (per curiam). There the Court held that a Kentucky law that required the posting of a copy of the Ten Commandments on the walls of public school classrooms was constitutionally infirm. Although accepting the possibility that the Ten Commandments could have a place in a properly oriented public school curriculum, the Court refused to accept a proffered secular purpose when the state merely posted the Commandments without making any real attempt to distill the secular significance of the Decalogue from its religious elements. Thus, the more dominant and widely recognized the religious element, the more fastidious must the government be in isolating and emphasizing its concern for only the nonreligious elements. Indeed, government has an obligation, if it would not contravene the Establishment Clause, to dissect the secular from the religious even in circumstances where private persons and organizations would perceive and treat the two as an amalgam. See Allen v. Morton, 495 F.2d 65, 73 n. 14 (D.C.Cir.1973) (opinion of Tamm, J.). Applying these principles to the case of Christmas, it is this Court's view that a high standard of care is demanded of government when it seeks to "celebrate" this holiday. The secular and religious dimensions share a common origin and many people, whose holiday observance includes both aspects, may not perceive them as clearly demarcated. It is too late in Establishment Clause jurisprudence to suggest that the Government may endorse the Christian view of Christmas as a celebration of the birthday of the Son of God. The fact that a majority of citizens may not consciously draw a line between the Christian and the secular dimensions of Christmas requires that the government be all the more careful to draw a line, and a bright one, between the two, and remain on the clearly secular side. The City apparently regards this construction of government's permissible role in dealing with an event having both significant secular and religious meaning as artificial and too restrictive. It seeks to avoid it by an argument that reduces in essence to this: (1) the secular dimension of Christmas is sufficiently developed to justify its observance as a national holiday; (2) because the City is permitted to celebrate the holiday, it must be permitted to celebrate all its component parts; (3) Christmas still has some religious component; (4) therefore, the City must be able to include that religious component, via the creche, in its Christmas display as long as it also includes the "justifying" secular elements. In the Court's view, this argument is merely a bootstrap. The City relies on the presence of a secular dimension to give government a toehold and then argues that government, once there on the strength of the secular, has carte blanche to enter the allied religious dimension. This argument 1165 would permit government to teach the religious message of the Bible because that document also has literary, social and historical value. Cf. Abington School District v. Schempp, 374 U.S. 203, 83 S. Ct. 1560, 10 L. Ed. 2d 844 (1963) (school authorities could not read Bible verses without comment despite the secular value such verses might have). It would permit government to aid the sectarian instructional parts of church-affiliated colleges because those same institutions also teach secular subjects. Cf. Tilton v. Richardson, 403 U.S. at 682-84, 91 S.Ct. at 2097-98 (striking down provision that would have permitted federally-financed buildings to some day be used for religious purposes). It would permit government to declare Sunday a legal day of rest for religious reasons because there are also social welfare reasons for establishing a uniform day of rest. Cf. McGowan v. Maryland, 366 U.S. 420, 453, 81 S. Ct. 1101, 1119, 6 L. Ed. 2d 393 (1961) (upholding Maryland Sunday closing law but warning that there might be a different result if it were shown that the purpose of a given Sunday law "is to use the state's coercive power to aid religion").[22] In the end, it would render the Establishment Clause a mere formula, for it is difficult to imagine any religious activity or object that would not have some saving secular qualities on which government could base its participation. See McGowan v. Maryland, 366 U.S. at 467, 81 S.Ct. at 1157 (Frankfurter, J., concurring) (noting that endowment of a church might be defended on theory that church inculcates moral concepts that make people better citizens). The identification of a secular dimension is not a license for government to range throughout the entire field with no thought for the secular or religious character of the area in which it moves. Rather, it is a delimitation of the bounds within which government must remain if it is not to trespass on forbidden ground. In short, the Court finds that the mere fact that the Christmas holiday has an important secular element does not insulate government involvement in the religious aspects of the holiday from further review under the Establishment Clause. B. The Creche as a Religious Symbol In contending that it has not violated the Establishment Clause, the City also argues that the inclusion of the creche in the Hodgson Park display is not primarily religious because the nativity scene in essence has become "secularized." As the Court understands this argument, the City is suggesting that most or all of the religious meaning that originally inhered in the nativity scene has been lost over time in the same way that other Christmas symbols, such as Santa Claus, have shed their religious meaning, or become "secularized." 1166 This argument requires the Court to examine the symbolism and meaning that attaches to the creche. The nativity scene owned by the City of Pawtucket is not in any respect extraordinary. It depicts Mary and Joseph with the Christ Child lying in the manger, adoring shepherds, reverential kings bearing gifts, and angels announcing and rejoicing in the birth. Like other nativity scenes, it portrays the story of the birth of Christ as described in the gospels. It attempts to capture, through the poses and facial expressions of the figures, a sense of awe and worship. Although the birth of Christ is a part of history in the sense that a real person named Jesus Christ was born in Judea approximately 1981 years ago, it borders on the frivolous to suggest that the creche is merely a rendering of that historical fact.[23] As Dr. Ramsbey explained, the object we know as a nativity scene or creche combines history and faith. It not only recognizes the fact that a child named Jesus was born, but also makes a statement about the extraordinary nature of that child by presenting his birth as attended by angels, revered by shepherds, and sought out by kings. The City nevertheless argues that the creche has lost much of its religious meaning in the same way that Santa Claus, Christmas trees, stars, bells, and other Christmas symbols have become secular. The Court finds these comparisons unpersuasive. It is generally accepted that the concept of Santa Claus can be traced to St. Nicholas, a bishop of the early Catholic Church. However, as one of plaintiffs' witnesses aptly observed, the modern day Santa Claus owes more to Clement Moore (and, one suspects, to present day television specials) than to the Fourth Century bishop. Santa Claus of today is a figure endowed with mythic trappings having no conceivable connection to his real-world progenitor he is a jolly bearded figure who lives at the North Pole and emerges on Christmas Eve in a flying sleigh pulled by eight reindeer to distribute toys manufactured by elves by climbing down chimneys. No such drastic mutation can be found in the case of the nativity scene. The modern day creche retains its faithfulness to the biblical accounts which first inspired renderings of what Christians believe took place at Christ's birth. As for other Christmas symbols stars, (whose use presumably originated as a reference to the Star of Bethlehem), bells, (presumably a reference to church bells), and the Christmas tree, (whose pagan origins make its Christian significance especially murky) it must be recognized that these are different kinds of symbols than the creche. To discern a religious import in the use of such common objects as stars, bells and trees, one must be able to associate them with the object or event that is of primary religious significance. The viewer must be able to recognize that the star represents the Star of Bethlehem which, according to the Bible, appeared on the night of Christ's birth and shone over the stable in which he lay; or that the bell represents the church bells that peal out on Christmas morning to call the faithful to worship; or that the lights on an evergreen tree represent the spiritual and everlasting light that Christianity believes Christ brought to a world in darkness. It may well be that, in view of the secular dimension that the celebration of Christmas has attained in modern life, most people no longer do, or even can, make the associations necessary to give these symbols a religious meaning. 1167 However, unlike stars, or bells, or trees, the creche is not a common, ordinary object that attains a religious dimension only if the viewer understands that it is intended to connote something more than its facial significance, and possesses the key to unlock that secondary meaning. The creche is more immediately connected to the religious import of Christmas because it is a direct representation of the full Biblical account of the birth of Christ. That collection of figures does not have an everyday meaning that must be transcended to reach the religious meaning. For anyone with the most rudimentary knowledge of the religious beliefs and history of Western civilization, the religious message of the creche is immediately and unenigmatically conveyed. In sum, the Court does not understand what meaning the creche, as a symbol, can have other than a religious meaning. It depicts the birth of Christ in a way that is not merely historical. It has not been so altered over the years as to relegate its religious connection to a matter of historical curiosity. It is the embodiment of the Christian view of the birth and nature of Christ. Unless that view has itself lost its religious significance, an artifact that portrays that view simply and unambiguously cannot be other than religious. The City suggests that the creche represents the non-sectarian ethical aspirations of peace and goodwill. Even assuming that this is an independent, secular meaning, the Court finds that it is subordinate to, and indeed flows from the fundamentally religious significance of the creche.[24] The Court does not consider Dr. Freeman's testimony to undermine the conclusion that the creche is indeed a religious symbol for purposes of the Establishment Clause. Dr. Freeman appeared to regard the ability to evoke a response of worship as critical to a religious symbol. His view of symbols was primarily a functional one. If the symbol or artifact elicited a worshipful response in those who viewed it, it was "religious"; if that same symbol, in a different setting, did not prompt viewers to worship, it was not "religious" in that setting. Thus, Dr. Freeman regarded the creche as a religious symbol in a church, but maintained that it was not a religious symbol in the Hodgson Park display because it would not induce viewers to engage in worship. While the Court does not question that this may be a valid approach in the context of a sociological or anthropological study of symbols, the Court believes that this mode of definition is too restrictive for purposes of First Amendment analysis. Cf. Crowley v. Smithsonian Institution, 636 F.2d 738, 742 (D.C.Cir.1980) (court disagrees with expert's definition of "religion" in Establishment Clause inquiry). "Symbolism is a primitive but effective way of communicating ideas. The use of an emblem or flag to symbolize some system, idea, institution, or personality, is a short cut from mind to mind." West Virginia State Board of Education v. Barnette, 319 U.S. 624, 632, 63 S. Ct. 1178, 1182, 87 L. Ed. 1628 (1943). One may understand the symbol's message so that the symbol has performed its job of communicating without agreeing with it or responding to it. So 1168 long as the viewer possesses the background knowledge necessary to comprehend what the symbol is meant to stand for, the symbol does not lose its power as a communicative device simply by being taken out of its original, or optimal, context. The American flag flying on top of the Capitol represents our country; that meaning does not disappear for people when the flag is displayed in a baseball stadium or even in a museum exhibit of flags of the world. Similarly, for anyone familiar with modern history, the swastika represents naziism whether it appears on the armband of a World War II German uniform or is scrawled by vandals in 1981 on the side of an American building. The fact that the viewer may not feel a patriotic response on seeing the American flag or be moved to practice the tenets of naziism on seeing the swastika does not mean that he has not understood the message these symbols convey. By the same token, the creche does not lose its power to make a theological statement simply because it is removed from a Christian church, nor is it any less a religious symbol because it does not necessarily invoke a response of worship. III The findings that the Christmas holiday has a significant religious aspect and that the creche is a religious symbol does not, of course, resolve the constitutional question. Government may involve itself in activities with a religious content as long as it does so carefully, in ways that avoid the harm that the Establishment Clause was intended to forestall. The Supreme Court has not yet given plenary consideration to a case challenging the use of religious symbolism. Perhaps the closest it has come is the recent case of Stone v. Graham, 449 U.S. 39, 101 S. Ct. 192, 66 L. Ed. 2d 199 (1980) (per curiam), in which the placard of the Ten Commandments posted in Kentucky's public classrooms had some aspect of a religious symbol. Cases involving state aid to religiously-affiliated schools and religious exercises within public schools, although not very helpful on their facts, do provide the basic method of analysis. To pass muster under the Establishment Clause, a statute must have a secular legislative purpose, its principal or primary effect must neither advance nor inhibit religion, and the statute must not foster an excessive government intanglement with religion. Lemon v. Kurtzman, 403 U.S. 602, 612-13, 91 S. Ct. 2105, 2111, 29 L.Ed.2d (1971). Recognizing that these factors are only guidelines to assist in ascertaining when the objectives of the First Amendment have been impaired, Meek v. Pittinger, 421 U.S. 349, 359, 95 S. Ct. 1753, 1760, 44 L. Ed. 2d 217 (1975); Tilton v. Richardson, 403 U.S. at 678, 91 S.Ct. at 2095, this Court must look to the purpose and effect of the City's inclusion of the creche in its Christmas display, and to whether this practice breeds administrative entanglement or political divisiveness. A. Purpose The fundamentals of the purpose test are easily stated. The government action must "reflect a clearly secular ... purpose." Committee for Public Education v. Nyquist, 413 U.S. at 773, 93 S.Ct. at 2965. While the rationale offered by the governmental entity is entitled to deference, Lemon v. Kurtzman, 403 U.S. at 613, 91 S.Ct. at 2111, the Court must closely scrutinize the stated purpose, McGowan v. Maryland, 366 U.S. at 449, 81 S.Ct. at 1117, and ensure that the action was indeed motivated by legitimate secular aims. E. g., Stone v. Graham, 449 U.S. at 41, 101 S.Ct. at 193; Hunt v. McNair, 413 U.S. 734, 741, 93 S. Ct. 2868, 2873, 37 L. Ed. 2d 923 (1973) (recognizing that "a legislature's declaration of purpose may not always be a fair guide to its true intent," but noting that the plaintiff had not suggested that the purpose was other than stated). In addressing the purpose test, the City first argues that the nativity scene has no purpose that can be considered apart from the purpose of the Hodgson Park display 1169 as a whole.[25] It asserts that "[i]n applying the tripartite test to a government activity which contains a religious element, the appropriate focus is not on the religious element but on the activity of which it is a part." (Memo at 17-18). In the Court's view, this overstates the role that the context in which the religious component appears plays in the search for purpose. Surely, a court should look to the rationale underlying the entire program or activity of which the religious element is a part in order better to ascertain the reasons for inclusion of the religious element. The nature and relationship of the nonreligious components may go a long way toward verifying the purported secular purpose. E. g., Walz v. Commissioner, 397 U.S. 664, 672-73, 90 S. Ct. 1409, 1413, 25 L. Ed. 2d 697 (1970) (in considering purpose of a tax exemption for churches, Court found evidence of secular purpose in fact that the charitable exemption included a broad range of educational, ideological, and service organizations). See also id. at 696-97, 90 S.Ct. at 1425-27 (Harlan, J., concurring). Thus, if a 16th century Italian hand-carved nativity scene is included in a City-sponsored museum display of Renaissance objets d'art, the context lends credence to an assertion that the purpose of including the creche was a secular one. Recognizing this admittedly important role of context is not the equivalent, however, of suggesting that the only relevant purpose is that of the overall activity or program of which the religious element is a part. See Valente v. Larson, 637 F.2d 562, 567-68 (8th Cir. 1981), prob. juris. noted, ___ U.S. ___, 101 S. Ct. 3028, 69 L. Ed. 2d 404 (1981). Whenever the government employs a religious object or involves itself with a religious practice, the Establishment Clause demands that it account for its reasons in stepping beyond the secular sphere to accomplish its goals. Cf. Abington School District v. Schempp, 374 U.S. at 231, 83 S.Ct. at 1576 (Brennan, J., concurring) (government may not use religious means to accomplish its ends where secular means would suffice). Those reasons may indeed be the same as its reasons for employing secular objects or engaging in secular practices as in the museum example above but they must nevertheless be ascertained and scrutinized. The government cannot insulate its motives for using an object with religious significance from scrutiny merely by commingling it with a plethora of nonreligious objects.[26] "Indeed, on any other view, the constitutional prohibition could always be brought to naught by adding a modicum of the secular." Everson v. Board of Education, 330 U.S. 1 at 47, 67 S. Ct. 504 at 526, 91 L. Ed. 711 (Rutledge, J., dissenting). 1170 Although the purpose of the Hodgson Park display as a whole is relevant to the constitutional inquiry, the City may not gloss over the fact that the creche occupies a unique position in the display. Unlike every other element, the nativity scene "appears neither to have been divorced from [its] religious origins nor deprived of [its] centrally religious character by the passage of time." Abington School District v. Schempp, 374 U.S. at 278, 83 S.Ct. at 1601 (Brennan, J., concurring). See McGowan v. Maryland, 366 U.S. at 431, 81 S.Ct. at 1108 (using similar standard to evaluate Sunday Closing Law). Accordingly, it is necessary to establish why this religious symbol was included with all the secular symbols of Christmas.[27] In his testimony, Mayor Lynch stated that the purposes for including the creche, like the purposes for the display as a whole, were both economic and cultural or traditional. (II, 54-55).[28] The first reason can be readily disposed of. The businessmen who testified on behalf of the downtown merchants readily agreed that the creche contributed nothing to the value of the display as a commercial draw. Cf. Lowe v. Eugene, 254 Ore. 518, 543, 463 P.2d 360 (1969) (cross erected in part to "enhance the commercial exploitation of the principal Christian holidays"). This leaves the purpose of "culture and tradition." The City argues that the presence of the creche in the display merely acknowledges the religious heritage of the holiday. (Memo at 15, 20). The City characterizes the creche as "part of the cultural symbolism of Christmas" and asserts that its inclusion in the display is simply "a straightforward recognition of a religious tradition." (Id. at 26). The Court is aware that at least two courts, with little hesitation, have accepted as a valid secular purpose for the inclusion of a nativity scene in a public Christmas display the intention to "show how the American people celebrate the holiday season surrounding Christmas." Allen v. Hickel, 424 F.2d 944, 949 (D.C.Cir.1970); Citizens Concerned For Separation of Church and State v. Denver, 508 F. Supp. 823 (D.Colo. 1981). With due respect for the learned judges involved in those decisions, this Court finds that rationale extremely troubling, both in the way it places an apparently neutral, secular characterization on something that may well be far more religious than the label implies, and in the ease with which such a justification can be asserted by the sponsoring government. Particularly when a belief or practice has been common to the majority for a long time, it becomes easy to regard the belief or practice as a matter of culture or tradition and thereby imply that they have somehow attained a neutral, objective status. "Culture," "religion," "history," "heritage," and "tradition" are not mutually 1171 exclusive categories. The values, beliefs, and practices of groups in our society over time become our culture and traditions. However, the fact that a belief is held by sufficient members of society to render it part of our culture as a whole, or that a practice is observed for a sufficient length of time to give it the status of one of our traditions does not mean that the belief or practice ceases to be religious or to be identified with one group. Recitation of the Lord's Prayer has been a practice of many, if not most, Americans for generations. However, even though its time-honored and widespread observance may make it a tradition, and indeed even an element of our culture, it remains essentially religious and Christian. We cannot permit the labels "cultural" or "traditional," even when validly applied, to blind us to the nature of the object so described. The Court perceives this danger in characterizing publically sponsored Christmas displays containing nativity scenes as mere depictions of how the "American people" celebrate the holiday. Santa Claus and Christmas trees have outgrown their religious beginnings and today are part of a nontheological ethos that can perhaps accurately be described as the "American" celebration of Christmas. In contrast, the nativity scene remains firmly tied to its religious origins and continues to express a fundamentally theological message about the nature of the child whose birth is there depicted. It represents the way Christians celebrate Christmas. Even though the majority of people in our country may be Christian and Christian beliefs and practices by their very pervasiveness have become an important part of our culture and tradition, it must be acknowledged that not every American is a Christian. The Court is not suggesting that government may never take cognizance of a cultural or traditional element that is religious in character. It is suggesting that, in considering the constitutionality of government displays that include a nativity scene, we must at least be frank in recognizing that that part of the display represents "culture" and "tradition" only in the sense that it represents a religious belief held by a substantial segment of our society for a long period of time. The City effectively concedes that the role of the creche in the Hodgson Park display is to evoke the religious aspect of Christmas. It states that the function of the creche is "really no different than the function of religion in the celebration of Christmas," and characterizes it as representing the "religious heritage" or "religious tradition"[29] of the holiday. It contends, however, that it is merely acknowledging the presence of the religious element, rather than promoting it. The line between "acknowledgment" and "promotion" is a fine one, especially when the religious beliefs or practices that the government would acknowledge are those held by the majority of its citizens. Moreover, although the Supreme Court has made it clear that the Establishment Clause does not require government to ignore the existence of religion in American life, it is equally clear that there are limits on the ability of government affirmatively to employ religious practices and objects to acknowledge religion's role. The opening of the school day with a prayer is forbidden even when the prayer is "based on our spiritual heritage," Engel v. Vitale, 370 U.S. at 425, 82 S.Ct. at 1264, and even though the practice might readily be explained as a "recognition" that many people and organizations traditionally begin their day with an invocation. Similarly, the government may not "acknowledge" the fact that the Bible is part of our religious heritage and has traditionally been regarded as inspirational by large portions of our society by reading verses, even without comment, in public schools. Abington School District v. Schempp, 374 U.S. at 224, 83 S.Ct. at 1572. Most recently, the Supreme Court has held 1172 that a state may not acknowledge the Ten Commandments as "the fundamental legal code of Western Civilization and the Common Law of the United States," by requiring the posting of a copy of the Decalogue in each public school classroom in the state. Stone v. Graham, 449 U.S. at 41, 101 S.Ct. at 193. If the City can display the symbol that epitomizes the religious meaning of Christmas in recognition of Christians' belief that it is the day on which the Son of God was born, may it also sponsor a Catholic Mass in Hodgson Park on Christmas Eve in order to "acknowledge" that Midnight Mass is a part of our religious heritage and one of the traditional ways in which many Americans celebrate Christmas? Cf. Gilfillan v. Philadelphia, 637 F.2d 924, 930 (3d Cir. 1980), cert. denied, ___ U.S. ___, 101 S. Ct. 2322, 68 L. Ed. 2d 845 (1981) (construction of platform for Papal Mass). By posing such a question the Court does not mean to imply that this is an area in which one can paint with a broad brush. The making of fine distinctions is, for better or worse, the essence of Establishment Clause analysis. Walz v. Commissioner, 397 U.S. at 679, 90 S.Ct. at 1416. It does suggest, however, that considerable problems arise whenever government purports to "acknowledge" a religious practice or belief, particularly one to which the majority adheres, by the public presentation of sacred symbols, objects, or practices outside of such neutralizing contexts as museum displays, comparative religion or culture courses, and the like. After careful consideration of the circumstances of this case, the Court concludes that it need not define the precise limits of Pawtucket's power to use a religious symbol to acknowledge the existence of religious beliefs or traditions because it finds that the purpose of including a nativity scene in the Hodgson Park display was not merely the neutral recognition that Christmas possesses a religious significance for some people. Rather, Pawtucket's use of a patently religious symbol raises an inference that the City approved and intended to promote the theological message that the symbol conveys. In the Court's view, nothing in the record undermines the reasonableness of drawing that inference here. Indeed, several statements and actions of the City and the Mayor support it. First, the City has never attempted to disclaim, by means of a written notice or otherwise, any endorsement of the religious message that a creche particularly when included as part of a Christmas display during the Christmas season conveys. Cf. Allen v. Morton, 333 F. Supp. 1088, 1095 n.5 (D.D.C.1971) (government disavowed any affiliation with the religious content of creche in pamphlets and signs). Although this Court is not suggesting that such a disclaimer would necessarily cure any Establishment Clause problem, see Stone v. Graham, 449 U.S. at 41, 101 S.Ct. at 193, the City's failure to attempt to counter the reasonable inference of endorsement of Christian beliefs created by its ownership and display of the creche is evidence of its purpose. Second, the only religious heritage and traditions that have been part of Pawtucket's official ceremonies and displays are those of the Christian majority of its citizenry. If the City's goal in "acknowledging" the religious heritage of Christmas is to enhance the viewer's knowledge of American life and culture, it is proceeding in a rather peculiar way when it exhibits only those elements with which most viewers are already familiar through their own experience. The Court is not proposing that the City create "an immense bulletin board whereon symbols of all faiths could be thumbtacked or otherwise displayed," Fox v. Los Angeles, 22 C.3d 792, 150 Cal. Rptr. 867, 587 P.2d 663, 665 (Cal.S.C.1978). However, if the majority's religious heritage and customs are the only ones that, in the end, are "acknowledged," the asserted neutral purpose is cast into some doubt. Third, arguments that the City makes in defense of use of the creche also give an insight into the reasons for its presence in the Hodgson Park display. The City argues, "If government could celebrate a national holiday only by removing all of its 1173 religious elements, the Establishment Clause would have achieved the very hostility toward religion which the Supreme Court has long and consistently disavowed as inimical to our constitutional tradition." (Memo at 26). It is hard to see how limiting the City's celebration of Christmas to the secular aspect that permits its designation as a national holiday in the first place is hostile to religion unless by "hostility" the City means that a lavish celebration of the holiday which does not include some reference to Christ will aggrandize the secular dimension of Christmas to the detriment of the churches and religious groups who are struggling to "keep Christ in Christmas." A leitmotif in this litigation and the controversy surrounding it has been the assertion that to remove the creche from the Christmas display is to remove the guest of honor from his own birthday party. See, e. g. (II, 22-23) (testimony of Dr. Freeman); Mayor's interview with the Good News Paper in Pl. Ex. 12. This assertion, of course, is quite true when one is speaking of the Christian view of Christmas. However, it is not true when speaking of the secular aspect in which non-Christians participate and which government may observe as a national holiday.[30] Although Christians may deplore the growth of the secular dimension and deem it vital to retain the spiritual essence of Christmas as a religious observance of the birth of the Son of God, government may not assist in the fight to keep Christ in Christmas. To do so is to endorse a religious belief and aid in the promulgation of that belief. The Court concludes that Pawtucket has tried to endorse and promulgate religious beliefs by including a nativity scene in its display. The City argues that "as part of the cultural symbolism of Christmas, the nativity scene does have a legitimate place which can be disparaged only in the course of an aggressive attack on all religious symbolism which in effect would amount to an establishment of irreligion ...." (Memo at 26). Although couching its position in terms of culture and tradition a characterization which, as noted earlier, may not be permitted to conceal the fact that any cultural or traditional significance the creche possesses stems from its time-honored but not time-diminished place in the religious beliefs and practices of the Christian majority the City, like most of its residents and neighbors who voiced their views of this lawsuit, regards the issue as whether Pawtucket will be forced to align itself with those who promote the secular, "irreligious" aspect of Christmas by deleting reference to Christ in its Christmas celebrations. This is the import of the Mayor's press conference promise to fight all the way a perceived attempt to take Christ out of Christmas. It is also the import of his statements, in the Good News Paper interview and on the stand, (II, 67), that attempts to eliminate the creche are attempts to establish a "non-religion." If the City indeed regarded the role of the nativity scene in the display as a neutral recognition of a cultural phenomenon devoid of any significant quantum of religious meaning or any endorsement of a religious message, it would not consider deletion of the creche a blow to religion. Cf. Abington School District v. Schempp, 374 U.S. at 224, 83 S.Ct. at 1572 (provision for alternative use of Catholic version of Bible is evidence that State did not regard readings as "nonreligious moral inspiration" or secular teaching tool). In the Court's view, the City has accepted and implemented the view of its predominantly Christian citizens that it is a "good thing" to have a creche in a Christmas display, see (II, 60, 67-68) (Mayor's testimony), because it is a good thing to "keep Christ in Christmas." Irrespective of all the excellent religious reasons that may lead private individuals and organizations 1174 and religious institutions to embark on such a crusade, there is no independent secular justification for government's doing so.[31] The Court concludes that the inclusion of the creche in the Hodgson Park display was not prompted by the "clearly secular purpose" that the Lemon test requires. Rather, the nativity scene was made part of the display in order to express the City's approval and endorsement of the religious message that the symbol conveys. B. Effect To pass Establishment Clause scrutiny, the governmental action must have "a primary effect that neither advances nor inhibits religion." Committee for Public Education v. Nyquist, 413 U.S. at 773, 93 S.Ct. at 2965. The Supreme Court has recognized that governmental actions may have more than one primary effect. Id. at 783-84 n.39, 93 S.Ct. at 2970-71 n.39. Although governmental activity that confers "some benefit" on religion is not necessarily unconstitutional, Tilton v. Richardson, 403 U.S. at 679, 91 S.Ct. at 2096, the existence of "some legitimate end under the State's police power" does not necessarily validate such activity. Committee for Public Education v. Nyquist, 413 U.S. at 783-84 n.39, 93 S.Ct. at 2970-71 n.39. Thus, action having the "direct and immediate effect of advancing religion" violates the First Amendment even though it may immediately and effectively promote legitimate secular ends. Id. See Grendel's Den, Inc. v. Goodwin, 662 F.2d 102, 104 (1st Cir. 1981) (rehearing en banc). The Supreme Court has stated that the Establishment Clause reaches not only the actual establishment of religion, but also the "sponsorship, financial support, and active involvement of the sovereign in religious activity." Committee for Public Education v. Nyquist, 413 U.S. at 772, 93 S.Ct. at 2965, quoting Walz v. Commissioner, 397 U.S. at 668, 90 S.Ct. at 1411 (emphasis added). The government need not overtly support particular sects or rites of worship. If government is "`utilizing the prestige, power, and influence' of a public institution to bring religion into the lives of citizens," Walz v. Commissioner, 397 U.S. at 696, 90 S.Ct. at 1425 (concurring opinion, Harlan, J.) (quoting, in part, Justice Goldberg's concurrence in Schempp), the Establishment Clause is violated. Government must be neutral not only in its relations with different sects, but also in its relations with believers and nonbelievers. Epperson v. Arkansas, 393 U.S. 97 at 104, 89 S. Ct. 266 at 270, 21 L. Ed. 2d 228. See McCollum v. Board of Education, 333 U.S. at 210 & n.6, 68 S.Ct. at 464 & n.6; Everson v. Board of Education, 330 U.S. at 15-16, 67 S.Ct. at 511. In order for governmental action to pass muster under the Establishment Clause, the government must dispel even the appearance of affiliation with the religious message, Roemer v. Maryland Public Works Board, 426 U.S. 736 at 747-48, 96 S. Ct. 2337 at 2345, 49 L. Ed. 2d 179; see generally Tribe, American Constitutional Law § 14-9 at 844-45 (1978), for apparent sponsorship is as likely as intentional endorsement to breed religious chauvinism in those whose beliefs are seemingly favored as "good" or "true," and alienate those whose beliefs are seemingly dismissed as unworthy of official attention. For example, in both Stone v. Graham and Abington School District v. Schempp, the Supreme Court found that governmental action produced the effect of an official alignment with, and promotion of, a religious message even though neither case involved an affirmative attempt to use the religious items to proselytize. See 449 U.S. at 41-42, 101 S.Ct. at 193; 374 U.S. at 223-24, 83 S.Ct. at 1175 1572. The intense and widely recognized religious element in the Ten Commandments (Stone) and the Bible (Schempp) required countervailing measures even stronger than Kentucky's written statement of secular purpose or Abington's presentation of biblical readings without comment or any other element of a religious service.[32] Similarly, in a recent lower court opinion, North Carolina's inclusion of a "Motorist's Prayer" among the various items on the back of its highway map was sufficient without more to effect an advancement of religion through the appearance of official endorsement of the prayer's content. Hall v. Bradshaw, 630 F.2d at 1020-21. Furthermore, Philadelphia's construction of a platform adorned with a cross for Pope John Paul's celebration of mass created the appearance of a municipal imprimatur on the religious message of the Papal Mass. This action violated the Establishment Clause even though city officials took no part in the papal rite or in the preliminaries of dispatching invitations and policing seating arrangements. Gilfillan v. Philadelphia, 637 F.2d at 931. These latter cases recognize that government sponsorship of religious beliefs can occur in ways far more subtle than endowing state churches or mandating acceptance of certain religious rites or tenets. It can take the form of "passive" use of objects or symbols that people perceive as having significant religious meaning in a manner that does not successfully shift the public perception to the object's nonreligious elements. Moreover, it is misleading to use the term "passive," for this suggests that governmental actions cannot shape public values and perceptions unless the government announces overtly its intention to make a value judgment. The very fact that it employs a religious symbol represents an active and deliberate incursion by government into the sphere of religion. If the effect of this endorsement is to be avoided, government must not merely be silent about the symbol. Rather, government must take affirmative steps to demonstrate that it has not chosen the symbol because it approves what the symbol represents. The effect of Pawtucket's nativity scene must be analyzed in light of these general principles. This Court has discussed its reasons for concluding that the creche has not lost its religious significance and that it continues to make a strong and essentially theological statement about the nature of Christ. In light of this finding, the question is whether, irrespective of the City's purpose, the effect of Pawtucket's "passive" display of a nativity scene as part of its lavish Christmas decorations is the appearance of an official imprimatur on the religious message of the creche and on Christian beliefs, thereby aiding the Christian religion and violating the City's constitutional duty to maintain a neutral position vis a vis Christians, non-Christians, and non-believers. The City suggests that such an effect has not occurred because: 1) prior to this lawsuit, people did not know of the City's connection to the Hodgson Park display; 2) the creche represents only a minor and insignificant part of the display; and 3) the creche is only one part of a display consisting primarily of secular Christmas symbols, and the City has made no affirmative attempt 1176 to highlight or exploit its religious message. In such circumstances, the City argues, the effect is merely to "acknowledge" the religious heritage and traditions of Christmas without signalling any endorsement of the underlying beliefs. These arguments will be considered in order.[33] The City's suggestion that, prior to this lawsuit, people did not associate the Hodgson Park display with the City borders on the frivolous. The Director of Parks and Recreation testified that the opening ceremonies at the Park are conducted by the Mayor, officiating in conjunction with Santa Claus, who arrives on a City firetruck. When the main switch is thrown, the lights at City Hall are illuminated simultaneously with those in Hodgson Park. The same music is broadcast at both places by a common sound system. Even though these factors[34] may not reveal to onlookers the precise financial arrangements underlying the display,[35] they surely indicate that the City has some significant part in its erection. The Court thus finds that people knew that the Hodgson Park display, including the nativity scene, was sponsored at least in part by the City long before the plaintiffs came on the scene.[36] The City's second argument stresses that the creche occupies only a small portion of the groundspace in the Park, requires only a modicum of setup time, and represents only a minor percentage of the total cost and present value of the display. The City asserts that the nativity scene is thus a very minor part of the display. In the Court's view, however, the reasons offered by the City are unpersuasive because in ascertaining effect the Court must gauge how those who view the Hodgson Park display perceive it. First, visitors to the display could not possibly know the relative cost, value, or setup requirements of the various components. Second, carefully studying the photographs introduced into evidence and taking a view of the site, the Court concludes that, despite the small amount of ground covered by the creche, viewers would not regard the creche as an insignificant part of the display. It is an almost life sized[37] tableau marked off by a white picket fence. Furthermore, its location lends the creche significance. The creche faces the Roosevelt Avenue bus stops and access stairs where the bulk of the display is placed. Moreover, the creche is near two of the most enticing parts of the display for children Santa's house and the talking wishing well. Although the Court recognizes that one cannot see the creche from all possible vantage points, it is clear from the City's own photos (see, especially, Def. Ex.C1) that people standing at the two bus shelters and looking down at the display 1177 will see the creche centrally and prominently positioned. Having disposed of the City's first two arguments, the Court finally must resolve whether Pawtucket's "mere" inclusion of a nativity scene in a display containing numerous secular symbols of Christmas violates the Establishment Clause. May Pawtucket constitutionally erect the creche as long as it does not attempt overtly to encourage persons to worship at or accept the religious message of, the creche? The Court finds that, despite its "passive nature," erection of the creche has the real and substantial effect of affiliating the City with the Christian beliefs that the creche represents. Pawtucket contends that the inclusion of the creche does not have a primarily religious effect because the secular symbols in the display shift the viewer's attention away from the creche's religious symbolism. The Court disagrees that the secular context in which the creche is viewed is as neutralizing as the City's argument suggests. The secular and religious aspects of Christmas co-exist comfortably. Thus, when the City commingles secular and religious symbols in the display, it simultaneously evokes both dimensions of Christmas. Santa Claus is not rendered religious by his proximity to the creche; the creche is not rendered secular by its proximity to Santa Claus. In fact, by displaying the nativity scene in a setting with Christmas trees, bright lights, Christmas carols, and other Christmas symbols, the City has placed the creche in a setting supportive of its meaning. See Allen v. Morton, 495 F.2d at 89 & n.55 (opinion of Leventhal, J.). Having found that the presence of the secular symbols of Christmas does not mute the religious message of the creche, the Court concludes that people who view the Hodgson Park display are not likely to regard the nativity scene as a mere "acknowledgement" that religious "heritage" and "traditions" are for some people a part of Christmas. The City's Christmas display is neither a museum exhibit where one goes expecting to see cultural artifacts, nor an educational course in which one expects to be taught about heritage and tradition. Cf. Florey v. Sioux Falls School District, 619 F.2d 1311 (8th Cir.), cert. denied, 449 U.S. 987, 101 S. Ct. 409, 66 L. Ed. 2d 251 (1980) (upholding regulations governing the teaching in public schools about religious meaning and traditions of holidays).[38] The display is a celebration of the holiday, not an exposition about it. Furthermore, the Court finds that Pawtucket has done nothing to shift the viewer's attention away from the creche's religious message or to counteract viewers' reasonable inference that the creche is there because the City supports that message and 1178 wishes to promulgate it.[39] The City has not dispelled the appearance of approval of and affiliation with, the Christian view of Christmas.[40] In view of the creche's unmuted religious message and the undispelled appearance of Pawtucket's affiliation with this message, this Court holds that the City's inclusion of a nativity scene in its Christmas display violates the Establishment Clause. Even if the creche does advance the nontheological goals of peace, charity, and goodwill, the Court finds that the appearance of official sponsorship of Christian beliefs that the creche conveys confers more than a remote and incidental benefit on Christianity. By using a religious symbol in a seasonal celebration of a holiday having religious significance for some groups, the City has given those groups special status. It has singled out their religious beliefs as worthy of particular attention, thereby implying that these beliefs are true or especially desirable. This aura of governmental approval is a subsidy as real and as valuable as financial assistance. Moreover, Pawtucket's use of the creche encourages in its citizens the belief that the Christian majority has the right to have "its" government reflect and express the religious beliefs that the majority regards as important. Were the notion that it is desirable for government to support the religious views of the majority to become so ingrained as to be accepted without scrutiny and defended without hesitation, a significant breach would be made in the constitutional citadel that protects our religious liberty. C. Entanglement The final part of the Establishment Clause's tripartite test focuses on the degree and quality of governmental interaction with religion that the challenged activity promotes. See Committee for Public Education v. Nyquist, 413 U.S. at 794-97, 93 S.Ct. at 2976; Lemon v. Kurtzman, 403 U.S. at 615, 91 S.Ct. at 2112. The entanglement inquiry has two parts. The first, often referred to as "administrative entanglement," is implicated when the practice at issue brings government officials into close, 1179 ongoing contact with the affairs of religious institutions, thereby endangering the independence and integrity of both Church and State. See, e. g., Lemon v. Kurtzman, 403 U.S. at 615-20, 91 S.Ct. at 2112-14; Meek v. Pittinger, 421 U.S. at 369-72, 95 S.Ct. at 1765-66. The second part of the inquiry focuses on "the potential for political divisiveness." Lemon v. Kurtzman, 403 U.S. at 623, 91 S.Ct. at 2116. This half of entanglement analysis is based on the recognition that "competition among religious sects for political and religious supremacy has occasioned considerable civil strife, `generated in large part' by competing efforts to gain or maintain the support of government." Committee for Public Education v. Nyquist, 413 U.S. at 796, 93 S.Ct. at 2977, quoting Everson v. Board of Education, 330 U.S. at 8-9, 67 S.Ct. at 507. This second component assesses the probability that the governmental involvement with religion at issue will encourage division of the polity along religious lines and infect robust political debate with an unhealthy strain of sectarian contentiousness. Id. 413 U.S. at 796 n.54, 93 S.Ct. at 2977. One need not look back into history to understand the seriousness of this latter concern about political divisiveness; the contemporary situation in several countries amply demonstrates the dreadful struggles and suffering that can result when government becomes a tool for executing religious goals and beliefs. Unquestionably, administrative entanglement has not occurred in this case. The evidence shows that Pawtucket purchased the components and designed the layout of the Hodgson Park display without interaction with any of the community's churches or religious organizations. Cf. Allen v. Morton, 495 F.2d at 79-85 (opinion of Leventhal, J.). In the Court's opinion, however, Pawtucket's ownership and display of the creche does implicate the political divisiveness strand of the entanglement test. The cases in which the Supreme Court has discussed potential divisiveness have involved new programs with little or no "track record" of operation. Thus, in these cases, the Court had to project the potential for divisiveness by considering such factors as the need for recurrent budgetary appropriations, compare Lemon v. Kurtzman, 403 U.S. at 623, 91 S.Ct. at 2116 (annual) with Tilton v. Richardson, 403 U.S. at 688, 91 S.Ct. at 2100 (single lump sum), and the nature of the constituency that would be concerned about the government's action, see Tilton v. Richardson, 403 U.S. at 688-89, 91 S.Ct. at 2100-01 (contrasting the "essentially local" nature of primary and secondary school problems with the "diverse and widely dispersed" constituency of colleges and universities). This case is different. The creche has a "track record." As the City properly points out, a City-owned creche, has been displayed for forty years. Moreover, the practice has been marked by no apparent dissention. That calm history must be acknowledged in assessing the potential for divisiveness in the City's action. The meaning of this history is ambiguous. Was the silence of the past forty years a healthy sign, indicating that members of minority religions did not feel slighted or alienated by the practice and had no desire for "equal time" for their religious holidays and symbols? Or, was the silence an unhealthy indication of the fear of angering the predominantly Christian majority? In short, was it the product of a pragmatic calculation that enduring one religious symbol celebrating one Christian holiday was a small price to pay for harmony among the townspeople? The community's reaction to the filing of this lawsuit lends considerable plausibility to the latter interpretation. The City suggests that a "fair representation of the public concern is that it was directed at a perceived attack upon the symbolism of Christmas which is generally viewed as a symbolism of goodwill and brotherhood." (Memo at 27). However, the Court has found that most of those who communicated their support for the Mayor were not defending a nonsectarian emblem of theologically neutral aspirations. Rather, the creche was championed as the essence of the "true" meaning of Christmas, the vehicle 1180 by which belief in and dependence upon God could best be conveyed during the holiday season. Several comments explicitly linked display of the creche with the expression of the majority's faith in Christ and its desire to commemorate his birth, and castigated "minority" attempts to prevent government from reflecting the majority's will in this manner. Furthermore, religious leaders have come forward and encouraged the City to confine its holiday celebrations to nonsectarian symbols. Other religious leaders have responded angrily, sometimes questioning the spiritual commitment of the first group. See clippings and letters in Pl. Exs. 11 & 12. The few persons who wrote Letters to the Editor urging removal of the creche encountered furious criticism, usually expressed in terms of religious views and convictions. Former Mayor Lynch mustered City employees for a show of support at the creche, leading the crowd in carols by suggesting that they sing "another one that apparently bothers people." Clipping in Pl. Ex. 12. In sum, the atmosphere has been a horrifying one of anger, hostility, name calling, and political maneuvering, all prompted by the fact that someone had questioned the City's ownership and display of a religious symbol. A reasonable interpretation of this public reaction is that Pawtucket's practice of displaying a creche occasions no divisiveness only as long as it continues unquestioned. Once challenged, however, the veneer of peace and harmony is stripped away. The absence of religious dissension in Pawtucket over the past forty years does not mean that the governmental action has not produced a division along religious lines. It merely means that until the plaintiffs in this case had the temerity to challenge Pawtucket's official practice, the potential for divisiveness remained unrealized. When the challenge finally came, the atmosphere in Pawtucket became charged with religious controversy and polluted by the acrid fumes of religious chauvinism. The Supreme Court has never held that the potential for political divisiveness is alone sufficient to invalidate a government's action under the Establishment Clause. It has emphasized, however, that this is a "warning signal" that the mandate of the First Amendment has been compromised. See Committee for Public Education v. Nyquist, 413 U.S. at 798, 93 S.Ct. at 2978. Viewing this warning signal of potential divisiveness in conjunction with its earlier findings of improper purpose and impermissible effect, the Court concludes that the Establishment Clause has been violated in this case. IV. Having spent considerable time exploring what this case is about, the Court feels compelled to add a few words about what it is not about. It is not about an infringement of the right of Christians freely to express their belief that Christmas is the day on which the Son of God was born. This decision has nothing to do with the ability of private citizens to display the creche in their homes, yards, businesses, or churches. However, the right to express one's own religious beliefs does not include the right to have one's government express those beliefs simply because the believers constitute a majority. Our form of government is grounded in the principle that the soundest course for our country is most likely that plotted by the majority of our people. However, the Bill of Rights is a cardinal exception to that principle, mandating that in a few, vital areas the demands of the majority must yield for the ultimate good of all. "We have staked the very existence of our country on the faith that complete separation between the state and religion is best for the state and best for religion." Torcaso v. Watkins, 367 U.S. 488 at 493-94, 81 S. Ct. 1680 at 1682-83, 6 L. Ed. 2d 982, quoting McCollum v. Board of Education, 333 U.S. at 213, 68 S.Ct. at 466 (Frankfurter, J., concurring). We cannot have it both ways a government that scrupulously honors each person's freedom of belief and yet publicly aligns itself with one particular set of beliefs. The endorsement of one is a 1181 disparagement of others that were not chosen, and it becomes increasingly difficult to accord equal respect to what has been publicly marked as less worthy. The First Amendment requires that government provide an atmosphere of intellectual and spiritual freedom of thought and expression. In such an atmosphere, beliefs that have the strength of truth will flourish of their own power. Religion may demand, and government may give, no more than this. "We are a religious people whose institutions presuppose a Supreme Being. Under our Bill of Rights free play is given for making religion an active force in our lives. But if a religious leaven is to be worked into the affairs of our people, it is to be done by individuals or groups, not by the Government." Engel v. Vitale, 370 U.S. at 443, 82 S.Ct. at 1273 (Douglas, J., concurring) (citations, quotation marks, and footnotes omitted). This Court finds that by including a nativity scene in its Christmas display, the City of Pawtucket has violated the Establishment Clause of the Constitution. Therefore, it is hereby ordered that the City be permanently enjoined from continuing this practice. So ordered. NOTES [*] The Court wishes to express its deep appreciation to Professor Robert Destro of Marquette University School of Law, and Professor Ira Lupu, of Boston University School of Law, who appeared as amici in this case. Their scholarly briefs provided invaluable assistance to the Court in resolving the difficult and sensitive issues presented here. [1] Citations to the transcript in this case will take the form of a roman numeral designating volume and an arabic numeral designating page. "I" indicates the testimony given on February 3, 1981. "II" indicates the testimony given on February 5. The testimony given on February 6 is designated "III", although it is included in the same binding as that of the preceding day. [2] Dennis Lynch has been replaced by William F. Harty, Jr. as Mayor of Pawtucket. See note 3 infra. [3] This intention was reiterated at trial. (II, 53). Indeed, Mayor Lynch expressed his desire to have an even better looking creche next year. (Id.) The strength of the Mayor's commitment to maintaining the nativity scene if at all possible was manifest in his testimony. See II, 53-54, 63-65. While acknowledging his duty to abide by the constitutional rulings of the Court, the Mayor indicated his intention to "figure some other way to have a nativity scene as part of the historical tradition and part of the full Christmas display." (II, 54). See also report of the "Good News" interview with Mayor Lynch in Plaintiff's Ex. 12 ("one way or another tradition like this is going to continue. No judge, no jury is going to undermine that.") On the admissibility and substantive accuracy of this newspaper account, see notes 14 & 15 infra. Since said hearing Mayor Lynch has resigned and has been succeeded by William F. Harty, Jr. A stipulation has been filed that Mayor Harty agrees with and adopts the position of former Mayor Lynch as stated in his testimony, but does not intend to make any additions or enlargements to the display. [4] The nativity scene thus remained part of Pawtucket's 1980-81 Christmas display. [5] In past years, the display was apparently located at another site further from the downtown area. Mayor Lynch testified that he was responsible for relocating the display in order to further assist the downtown revitalization efforts, but did not specify when the move had taken place. (II, 53, 78). No evidence was offered about the public or private character of the former site. [6] The Mayor testified that he had in fact made changes in the display in the past. (II, 52). He did not elaborate on the substance or timing of these alterations, or on the reasons for which they were made. But see newspaper clippings in Pl.Ex. 12 stating that Mayor has responded to ACLU's annual complaints about creche by "beefing up" the display. [7] The plaintiffs have received copies of this drawing and do not object to it. Based on trial testimony, various photographs offered as exhibits, and the Court's own view of Hodgson Park (taken after the display had been removed), the drawing appears to be an accurate approximation of the scene. [8] The Court does not mean to imply by this description that all the elements of the display are fully visible to persons standing at all points on the Roosevelt Avenue perimeter of the Park. As the defendants painstakingly pointed out at trial, what one sees of the display obviously depends to some degree on where one is standing. It is abundantly clear to the Court, however, that the optimal vantage point is the Roosevelt Avenue bus stop area, and that the elements of the display are deliberately placed so that persons standing in that area or entering the Park from the Roosevelt Avenue access steps are seeing the "front" of the display. [9] The nativity scene occupies an approximately 10' × 14' area. Testimony was offered as to the amount of space occupied by the creche relative to that occupied by the rest of the display. (I, 91). However, the suggested comparison was unhelpful because the figures were not adjusted to reflect all the groundspace not covered by any building or figure. (I, 118-19). [10] Plaintiffs' complaint challenged the allegedly religious nature of some of the music broadcast over this system. No evidence was presented on this issue and the Court regards the point as abandoned. [11] These statements were made in affidavits, not in testimony at trial. However, the parties have agreed to accept the statements in these affidavits as evidence in this case. [12] Mr. Brown testified at length about the ACLU's commitment to civil liberties. The substance of this testimony is not recounted here, because it was relevant only to the issue of standing which the Court has resolved on other grounds. [13] Mr. Brown was permitted to testify about the contents of these phone calls and to introduce clippings of the Letters to the Editor despite the City's objection. The letters and conversations are hearsay, for they are out of court statements offered to prove that the declarants actually believed or felt about the lawsuit and/or nativity scene what they stated they did. However, they are admissible under Fed.R.Evid. 803(3) as an exception to the hearsay rule. See 4 J. Weinstein, Evidence § 803(3)[03]. The declarants' comments in the calls and letters were statements of their then-existing state of mind about the appropriateness of the lawsuit and the City's use of the creche. In accordance with the restriction in § 803(3) on use of statements of belief, they may not be considered as evidence that what the declarants believed or felt was indeed so. However, they may be used to show that members of the community believe these things, and these reactions are relevant to the question of divisiveness. See text infra. Use of these items as evidence of the effect of the City's inclusion of the creche is a somewhat more difficult question, largely because it is not clear what the focus of the "effect" test is in cases where the challenged activity is the use of religious symbols. It seems unlikely that the legally significant effect is a purely subjective one, such that the outcome of the lawsuit depends on which side can produce the most witnesses who will testify about the effect the symbol had on them. On the other hand, symbols do not have meaning in the abstract; their effect is the message that they convey to the viewer. Therefore, a court could hardly divine the effect of a symbol without any reference to how people actually perceived it. This Court has concluded that the answer must lie somewhere between these two extremes. It has attempted to assess, in light of the nature of the symbol involved here, the time and manner of its use, and the background of the audience, how most people could reasonably be expected to interpret the message of the symbol and the City's reasons for using it. Because reaction to the nativity scene and the City's use of it is the issue, the phone calls and letters that reveal the feelings of some members of the community about the creche and the lawsuit can be used as evidence of effect without violating the restriction in Rule 803(3). [14] This testimony must be qualified somewhat by the Mayor's statement, made during the course of an interview with the Good News Paper, that the ACLU has requested removal of the creche from the City's display every year since the first year he became Mayor. See clipping in Pl.Ex. 12. The Mayor testified that he considered the report of this interview to be "a fine overall job." (II, 66). The Court therefore accepts its substantive accuracy. [15] Two of the Mayor's files, one filled with press clippings and the other filled with letters of support the Mayor had received, were produced at trial and offered by plaintiffs. Before ruling on their admissibility, the Court sought out defense counsel's position. Counsel responded that he had no objection to their introduction. (II, 71). On ascertaining that newspaper articles were included in the matter admitted, the Court specifically warned defendants that the files would be "in for all purposes" if they did not object. The City's counsel reiterated his acquiescence to admission. (II, 72). [16] Dr. Werle testified that he assumed that Hodgson Park was a public park because of the site of the display and its proximity to City Hall. (II, 48-49). [17] Dr. Ramsbey was one of ten local clergypersons who, after the Mayor's press conference and the onset of the public furor this lawsuit generated, issued the following statement: We clergy of several religious traditions wish to express a pastoral concern growing out of the controversy surrounding the display of a nativity scene with city funds in Pawtucket. Our concerns are several noted below. While the festivities, lights and generation of good will in this season have roots in both religion and secular tradition, the creche is a specifically religious symbol. Our country, while deeply influenced by the Judeo-Christian heritage, is not itself Judeo-Christian but is pluralistic, consisting of many rich religious traditions and recognizing the value of all. Government in our country, wisely recognizing the diversity of these traditions, was set up to steer clear of embracing any while protecting the religious freedom of all. We as pastors have a responsibility to educate our people in the history of religious strife and the futility of imposing religious beliefs on the human conscience. The specifically religious observance of this holiday period belongs in our homes and in our churches and synagogues. Although there are public recognitions of this glad season, they should be confined to those symbols and traditions which are not identified with any one group. We call upon our public officials not to exploit the strong sentiments associated with religious festivals and divide majority from minority. Rather, we hope they will rise to a statesperson-like position and avoid the insensitivity of foisting upon others any specific religious traditions. In this way, the true joy of the season can be appreciated by and made meaningful to the widest diversity of people. [18] Two of these letters encouraged the City to use non-sectarian symbols and expressions in its Christmas display so that the peace and goodwill of the season could be celebrated and shared by all without reference to denominational differences. The third letter questioned the ACLU's sense of proprieties in attacking the "innocuous" Hodgson Park display, but even more vehemently chided the Mayor for allegedly exploiting the issue for political gain. [19] These plaintiffs submitted affidavits stating that they are now and have been during the time period relevant to this suit taxpaying residents of Pawtucket. The defendants have agreed that the Court may admit these affidavits into evidence. [20] At the threshold, it should be settled that the fact the government activity challenged in this case took place on private property does not foreclose an Establishment Clause inquiry. The City of Pawtucket clearly sponsored the Hodgson Park display. City workers planned it and erected it, Santa Claus arrived on a City fire truck to open it, the Mayor pulled the switch to light it, and the light and sound systems of the nearby City Hall were connected to it. Moreover, every element in the display, including the creche, was purchased and is owned by the City, was assembled and dismantled by City workers, and was lighted at City expense. That the portion of these expenditures attributable to the creche is relatively small does not vitiate any Establishment Clause problems. The use of even the most negligible amount of tax money to promote a religious belief or subsidize a religious activity contravenes the constitutional prohibition. Stone v. Graham, 449 U.S. 39, 42 n.4, 101 S. Ct. 192, 194 n.4, 66 L. Ed. 2d 199 (1980) (per curiam); Committee for Public Education v. Nyquist, 413 U.S. at 797 n.56, 93 S.Ct. at 2978 n.56. [21] The Court takes judicial notice that its latest figures put the Roman Catholic population in Rhode Island at well above 60%. The total Christian population is undoubtedly higher still. In light of this demographic characteristic of this area, the Court considers the City's assertion to be at best disingenuous. Evidence adduced at trial indicated that Christmas retains a profound religious significance for Christians. Certainly, Christmas has not lost its religious meaning for many of the City's residents who wrote to the Mayor expressing their support for his position. [22] The City has relied heavily on McGowan v. Maryland in its argument. It suggests a "strong similarity between the religious origins of the Christmas holiday and the religious origins of Sunday as a weekly legal day of rest." (Memo at 10). It then construes McGowan as meaning that "the religious origin of, and benefit to, religion in the Sunday laws did not disqualify their secular content; rather, their dominant secular character made their considerable religious impact incidental." (Id. at 11). The City thus apparently regards McGowan as holding that the presence of a strong secular element is sufficient to vitiate any Establishment Clause problems by counteracting even a considerable religious element. The Supreme Court has rejected just such a reading of McGowan. Though set out in the course of a discussion of the "effect" strand of the Lemon test, the Court's explanation is useful here. In [McGowan] Sunday Closing Laws were upheld, not because their effect was, first, to promote the legitimate interest in a universal day of rest and recreation and only secondarily to assist religious interests; instead, approval flowed from the finding, based upon a close examination of the history of such laws, that they had only a remote and incidental effect advantageous to religious institutions. Committee for Public Education v. Nyquist, 413 U.S. at 783-84 n.39, 93 S.Ct. at 2970-71 n.39. McGowan upheld the Sunday Closing Laws not because the presence of the secular justified the presence of the religious, but because the Court found the religious no longer present in any appreciable degree as a basis for such laws. McGowan is distinguishable from this case because the Court finds that the religious aspects of Christmas and of the creche are not merely a matter of historical origin; rather, the religious elements of both remain vital and significant to this day. [23] Although the nativity scene goes beyond a strictly historical representation of the birth of Christ, the creche may be viewed as "historical" in the somewhat more specialized sense that we consider, for example, Greek myths to be historical. Beliefs about the origins of deities, such as the Greek belief that Athena, goddess of wisdom, sprang full-grown from the head of Zeus, are part of the history of a people. However, the Court does not understand the City to be using "historical" in this particular sense when it argues that the creche has an historical meaning because it is based on the historical fact that Jesus Christ was born. [24] Justice Frankfurter, concurring in McGowan v. Maryland, emphasized: If the primary end achieved by [the government action] is the affiliation or promotion of religious doctrine primary, in the sense that all secular ends which it purportedly serves are derivative from, not wholly independent of, the advancement of religion the [action] is beyond the power of the state. 366 U.S. at 466, 81 S.Ct. at 1157 (concurring opinion) (emphasis added). The Court accepts that the desire for peace and goodwill is not essentially religious. However, it is one thing to convey that desire by a banner that reads simply "Peace on Earth" or "Season's Greetings", and another to convey it by a representation of the birth of Christ. The relationship of the latter to peace and goodwill is grounded in, and cannot be isolated from, religious belief about what the birth of this child means to the world. The only way the creche can advance peace and goodwill is if viewers are led to believe in and practice what Christ taught. Cf. Abington School District v. Schempp, 374 U.S. at 231, 83 S.Ct. at 1576 (Brennan, J., concurring) (government may not use essentially religious means to serve governmental ends where secular means would suffice). [25] The City argues that, in this case, "there is no significant difference between the first two parts of the [Lemon] test purpose and effect. Whatever function the Hodgson Park Christmas display and its nativity scene component serve, is the function it is intended to serve." The City cites no authority in support of its position that the purpose and effect tests should be collapsed into one. Effect is indeed an indicia of purpose. See, e. g., Stone v. Graham, 449 U.S. at 42, 101 S.Ct. at 193 (analyzing purpose in light of probable effect of State's action). However, as the Court understands the law, the two must be inquired into separately, for a neutral effect will not save an action with an impermissible purpose. [26] Although the point has not been expressly articulated in the cases, it has often tacitly been recognized. For example, the fact that school officials set out numerous rules governing the teaching of academic subject matter and the conduct of the school day does not limit the court, in a challenge to require prayers or Bible readings, to an inquiry into the general purposes of a prescribed curriculum or organized opening exercises. See Abington School District v. Schempp, 374 U.S. 203, 83 S. Ct. 1560, 10 L. Ed. 2d 844 (1963); Engel v. Vitale, 370 U.S. 421, 82 S. Ct. 1261, 8 L. Ed. 2d 601 (1962). See also Stone v. Graham, 449 U.S. at 41-42, 101 S.Ct. at 193. Similarly, a State that includes a prayer in an official publication cannot, by placing it among several nonreligious items, limit the court's scrutiny to the purpose of the publication as a whole. See Hall v. Bradshaw, 630 F.2d 1018 (4th Cir. 1980), cert. denied, 450 U.S. 965, 101 S. Ct. 1480, 67 L. Ed. 2d 613 (1981) (prayer, scenic photos, and message from governor on reverse side of official highway map). See also Allen v. Morton, 495 F.2d 65, 68-69 (D.C.Cir.1973) (opinion of Tamm, J.) (looking both to purpose of Christmas Pageant of Peace as a whole and reason for inclusion of creche). [27] The City points to testimony that the display would still be erected and would still serve at least its commercial and morale functions even without the creche and argues that this "can only mean that the nativity scene is not a primary purpose or effect of the display". (Memo at 25). For the reasons given in the text, this argument is misdirected. The question is not whether the display is erected primarily for the purpose of featuring the creche (although this would be relevant if it were indeed so), but rather whether the City's purpose in including the creche as part of the display was a clearly secular one. The Court readily accepts that the City had several purposes in maintaining a Christmas display. That some of these purposes can be served as well without the creche merely proves that they were not the reasons why the creche was included in the first place. The Court also notes that the City has understated the perceived importance of the creche as a part of the City's Christmas decorations. At trial, the Mayor manifested a dogged determination to include the creche somehow, see, e. g. (II, 54). Such intense determination is not normally provoked by something perceived as a minor or incidental matter. [28] The Mayor also suggested that the creche was included in the display for aesthetic reasons. It seems unlikely that the creche, which by all accounts is not even well maintained, was erected principally for aesthetic purposes. The City does not press the point. In any case, the Court finds for reasons stated in the text that the City has sponsored the creche for reasons that are principally religious. [29] To the extent that the City uses "heritage" and "tradition" to suggest that the place of religion in Christmas is limited to an historical remnant with no real current vitality, the Court has already rejected that view. [30] The Court does not accept the suggestion that celebrating Christmas as the birth of Christ is no different from celebrating Presidents' Day as the birthday of Washington or Lincoln. Although Christ had an historical existence just as Washington or Lincoln did, his birth is marked because of his status as a religious leader, not a political one. Only by casting aside common sense and common experience can it be suggested that, in a country with a substantially Christian population, Christ is no different from George Washington. [31] This is not a case where government's action merely coincides with the tenets of a particular religion. See Harris v. McRae, 448 U.S. 297, 319, 100 S. Ct. 2671, 2689, 65 L. Ed. 2d 784 (1980); McGowan v. Maryland, 366 U.S. at 442, 81 S.Ct. at 1113. The conviction that abortion is wrong or that a legally-mandated day of rest is desirable may exist entirely apart from any particular religious belief. The conviction that an object representing the biblical account of the birth of Christ will foster goodwill, peace, and brotherhood is born of, not merely coincident to, Christian beliefs. See note 24 supra. [32] In Anderson v. Salt Lake City, 475 F.2d 29 (1973), the Tenth Circuit upheld the placement on public ground of a monument containing the Ten Commandments, the Star of David, and other symbols. The precedential value of Anderson is, however, questionable. First Stone v. Graham casts doubt on the conclusion that the Decalogue is no longer primarily religious in character. Second Anderson was decided three months prior to Committee for Public Education v. Nyquist, which held that governmental activity passes muster under the Establishment Clause only if its religious effect is "remote and incidental", regardless of its secular effects. The Anderson court found that the monument had both secular and religious effects, 475 F.2d at 34, and seems to have permitted the latter on the strength of the former. Such an approach appears inconsistent with Nyquist. See note 22 supra. Finally, the Anderson decision rested in part on the fact that the monument involved "no compulsion". 475 F.2d at 34. However, Supreme Court cases demonstrate that the absence of compulsion is not material in Establishment Clause inquiry. [33] This Court's emphasis on the City's arguments expresses no opinion as to who carries the burden of proof on the question of effect. Compare Allen v. Morton, 495 F.2d at 88 (opinion of Leventhal, J.), with id. at 73 n.14 (opinion of Tamm, J.). Rather, these arguments simply present, in a concise fashion, the major elements of the "effect" issue in this case. [34] City officials testified that City workers put in approximately 600 hours assembling and dismantling the display. (I, 67). One can assume that such a flurry of activity in the heart of the downtown area would be observed by the public. However, the Court could find nothing in the record to indicate whether these workers wear uniforms that identify them as City workers. [35] To support its argument the City points to Dr. Werle's "false assumption" that Hodgson Park was public property. In the Court's view, the fact that people might reasonably mistake the Park for public property hardly supports the City's position. As long as governmental involvement sufficient to trigger the Establishment Clause exists, the fact that the public may think the display sits on public property only enhances the possible appearance of official endorsement. In short, what people believe the government is doing is the concern of the "effect" analysis in this type of case. [36] After the lawsuit was filed, the Mayor clearly revealed the City's affiliation with the display and, particularly, with the creche by his press conference/rally and other public comments. Thus, the extent of the City's sponsorship became well established during the time the 1980 display was up and will, of course, be common knowledge for future displays. [37] The City seems unwilling to accept the label "life sized". That is, however, the description that appears on the invoices produced at trial. See Pl. Ex. 5. [38] The City relies heavily on Florey to support its position. Florey involved a facial challenge to regulations adopted in response to complaints that certain holiday exercises in the district's public schools were religious. The regulations appeared to be a good faith attempt to neutralize overtones of religious endorsement by specifying how schools could teach about religious aspects of holidays without teaching religion. At the time the Court of Appeals considered the case, the regulations had not been in effect long enough to produce a record of how theory was translated into practice. In analyzing the applicability of Florey to this case, one must consider two points. First, Florey involved a school a setting which, although especially delicate for Establishment Clause issues, is more conducive to instruction about culture and heritage than is a municipal holiday display. One goes to school expecting to learn about the world and the people in it. That is not one's expectation in going to Pawtucket's Christmas display. More important, the actual effect of applying the regulations in Florey was not known. 619 F.2d at 1319. It is only by looking at how religious symbols are actually used in the teaching process, including the relative amounts of emphasis given to Christian and non-Christian traditions, that one can determine whether a benign secular purpose has been successfully implemented to produce an effect only remotely or incidentally favorable to religion. See generally 619 F.2d at 1320-30 (McMillan, J., dissenting). In this case, the actual effects of the challenged practice can be observed, and, in the Court's opinion, are constitutionally defective irrespective of purpose. [39] Pawtucket has included in the display no explanatory plaques, cf. Allen v. Morton, 495 F.2d at 69 & n.2, (opinion of Tamm, J.), expressly disclaiming any affiliation with the theological message of the creche. It has no ongoing practice of marking the religious heritage and traditions of other, non-Christian groups by means of lavish public displays, which might indicate that the City's goal was impartial and educational, as well as dispel what is now the appearance of blatant discrimination in favor of one religion. The Court wishes to make it very clear, however, that it is not holding that the initiation of one or even both of these latter practices would necessarily be sufficient to meet Establishment Clause objections. As a practical matter, the Court anticipates that it would be very difficult to dissipate the appearance of endorsement that comes when government employs a religious symbol of the majority religion in a setting supportive of its meaning. The difficulties involved in giving comparable time, money, and attention to the customs and traditions of various religious groups, in order to avoid the appearance of partiality and, thus, sponsorship, would be formidable. Moreover, if Pawtucket embarks on a program of "acknowledging" divers religions' customs and traditions, would it be impermissibly favoring all religions over nonbelievers? What about the potential divisiveness caused by different groups demanding their share of City resources and recognition? In sum, such a "cure" may cause worse problems than the "disease". [40] This conclusion is reinforced by the opinions expressed in cards and letters of support received by Mayor Lynch after this lawsuit was filed. Although some writers found no religious content in the inclusion of the creche, most apparently believed that the presence of the nativity scene recognized and affirmed the Christian beliefs of the majority of the community. The City argues strenuously that these letters are relevant only in assessing the effect of the lawsuit, not the effect of the creche. The Court believes that this argument ignores the commonsense connection between the two. Although the lawsuit clearly prompted the letters, and although many letters contain the writer's opinions about the plaintiffs' action, people's opinions about the lawsuit are a product of their feelings about and reactions to, the City's use of the creche. Finally, it should be noted that Mr. Brown's testimony about the views of persons who called the talk show on which he appeared suggested a range of opinions very much like that revealed in the Mayor's letters.	01-03-2023	10-30-2013

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